High-Mileage Car Lease: Is It Right For You?

There are pros and cons to leasing a car vs. buying a car, and there isn't a single answer that is right for everyone. Leasing a car allows you to drive newer cars with hopefully less overall maintenance, but one downside is that you are given an annual mileage amount for the duration of your lease. If you think you'll be driving more than that, you may look for a high-mileage lease that offers additional mileage. Otherwise, you may find an unexpected bill for extra mileage at the end of the lease.

What Is A High-Mileage Lease?

When you lease a car, your monthly payment will be determined by your down payment, the cost of the new car and the expected residual value of the car at the end of the lease. Most car leases have a specific mileage allotment included in the terms of the lease. That way the dealership knows how many miles the car will have at the end of the lease, so they can set the residual value and the monthly payment amount.

If you think that you will drive more than the annual mileage allotment given in the lease contract, you may want to consider a high-mileage lease. With a high-mileage lease, you will have a higher annual mileage allotment. This will generally lower the car's value when you return the car at the end of your lease, which may mean a higher monthly payment than a standard lease. But it may still be a better idea than going over your allotted mileage amount and paying extra fees when you return your car.

How Do High-Mileage Leases Work?

High-mileage leases generally work the same way that standard leases work in almost all areas. The only difference is that a high-mileage lease comes with a higher annual mileage allotment than a standard lease. So if a standard 3-year lease has a 10,000-mile limit (30,000 miles total), a 3-year high-mileage lease might allow 15,000 miles each year (45,000 miles total). In both cases, you will pay extra if you go over your mileage limit. It's just that a high-mileage lease gives you a higher mileage amount to work with.

Leasing Vs. Buying A Car

There are pros and cons to leasing vs. buying a car, and it's important to understand the differences before you decide on one or the other. When you buy a used or new car, you must pay cash or get a loan for the entire purchase amount. In a lease, you are only financing a portion of the car's value, which means your payment will often be lower. But with a lease, you are given a set number of miles you're allowed to drive, as compared to buying a car which comes with no such limit. The biggest difference between the two is that when you buy a car, you are the owner — with a lease, the bank owns the car, and you have to give it back at the end of the lease term.

Pros And Cons Of High-Mileage Leases

Of course, there are pros and cons to getting a high-mileage lease.

Pros

• Higher annual mileage limits
• May be able to avoid extra mileage fees at the end of the lease
• Additional flexibility

Cons

• Higher monthly payment than a standard lease with fewer miles
• May not be available at all dealerships
• You may be underwater on the value of the car (a situation that occurs when you owe more than the car is worth)

How To Get A High-Mileage Car Lease

If you're interested in getting a high-mileage car lease, you will want to make sure that the dealership or online sales outlet offers one. Some dealerships may only offer a standard mileage allotment, and you'll have to either take it or leave it if you want to lease through them. If you shop around, you should be able to find a dealer that is willing to be flexible on how many miles are included in your lease — just be aware that you'll have to pay extra for that flexibility. Here are a few key considerations if you're looking at getting a high-mileage car lease:

• How many miles the car will likely be driven
• How much more you will pay each month for a high-mileage lease versus a regular lease
• Different high-mileage car lease options
• A vehicle test drive and inspection of all vehicle parts and features
• Consider if the added cost makes it a better deal to purchase the car outright

High-Mileage Lease FAQs

How long is a typical high-mileage car lease?

Just like with standard car lease contracts, you can sign a high-mileage lease for a variety of different lengths. Most leases will last anywhere from 2 – 5 years, and you'll have a specified annual mileage that you are allotted. Consider all of the terms of any car lease before you sign with a dealership so that you understand what will be required of you.

What happens if I go over the mileage limit?

As with a standard lease, there is likely to be a penalty if you go over the mileage limit. While a high-mileage lease generally has a higher mileage limit than a standard lease, that's not the same as having unlimited miles. Check your specific lease terms to see what your cost would be for going over your mileage limit.

Do I need to purchase an extended warranty on my high-mileage lease?

Having a high-mileage lease will not have an impact on whether an extended warranty makes sense for you, as compared to a standard lease. While an extended warranty may make sense in some situations, it's not right for everyone. Consider the pros and cons of having an extended warranty before making the decision.

When is a high-mileage lease a bad idea?

While you might be excited about getting additional miles on your lease, it doesn't come without a cost. High-mileage leases will generally cost more than an equivalent standard lease with a lower mileage limit. If you don't think you'll need the extra miles that come with a high-mileage lease, you might consider a lease with a standard allocation of mileage.

The Bottom Line

Most car leases come with a specific number of miles that you're allowed to drive for the duration of the lease, typically broken up per year. If you go over your allocated miles, you will generally have to pay an extra fee at the end of the lease. If you think you will go over the annual mileage that comes with a standard lease contract, you might consider a high-mileage car lease. Weigh the pros and cons before signing on the dotted line, and make sure your budget has room for a higher payment if you go with a high-mileage lease.

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