What Happens if You're Over Miles on a Lease?

Driving beyond mileage limits may cost you.

Will Sabel Courtney | 

Oct 21, 2024 | 3 min read

Manuel Carrillo III | Capital One

For many car shoppers, leases can be a way to obtain a new vehicle for less money every month than a traditional loan. That said, leasing a car has a few disadvantages. One of the biggest things to watch for in a lease is the limit on how far you can drive your vehicle over the course of your contract.

Why Leases Have Mileage Limits

The monthly lease payment is based on the difference between the vehicle's new price and the expected, or residual, value when the lease ends, plus other charges, such as taxes, interest, and documentation fees. When calculating the residual value, one factor is the number of miles put on the vehicle during the lease term. This is why vehicle leases almost always limit the miles you can drive without penalty.

Typically, these limits are established in terms of miles driven per year. The most common limits are 12,000 or 15,000 miles annually, according to the Federal Reserve. Different dealers and automakers may offer a wider range of options. Ford, for example, provides limits between 7,500 miles per year and 19,500.

Understand that if you sign a two-year lease with a total limit of 20,000 miles, it doesn't matter when you drive those miles. You can drive 19,000 miles the first year and 1,000 in the second. All that matters is that your total remains at or below the original 20,000-mile limit at the end of the lease term.

What Happens if You Go Over Your Miles

If you go over the contract's allotted miles, your leasing company will generally levy an added charge against you at the end of the term. Typically, these charges range from 10 cents to 25 cents per mile but can run higher. While these charges may sound insignificant, they can add up. For example, at 25 cents per mile, going an extra 2,000 miles per year over your mileage cap on a three-year lease would add a $500 cost at the end of the term.

What You Can Do if You Exceed Your Mileage Cap

Potential avenues exist to avoid paying for the extra miles you drove. Some lessors may let you extend your lease. These extensions often run from six to 12 months, adding additional miles to your original lease's allotment.

Buying out your lease or signing a new one is also possible. If you buy out the lease, there may be no fees for exceeding your mileage, as the leasing company that owns the car may pass on the vehicle's lower residual value to you.

It's also possible that the dealership might waive some of the extra mileage fees if you sign a new lease for another vehicle. It may be worth inquiring about this.

Will Sabel Courtney

Will Sabel Courtney is a journalist and writer with wide experience in newspaper and magazine writing, focusing on automotive, entertainment, and lifestyle topics. He's based in the Northeastern region of the United States.