Beware of the Low Mileage Car Lease
As car prices go up, leasing a car gets more popular. Especially if you have your eye on a more expensive luxury model, it may feel more feasible to lease rather than buy a car. Still, there are different types of leases. Lease deals rattle with varying jargon in an attempt to draw consumers in. Beware of the low mileage car lease, because––unless you know you can realistically stay within the mileage terms––they can be a trap full of hidden fees.
What is a low mileage lease?
Most car leases have terms in a particular mileage range. The most common mileage terms for a car lease are for 3 years and 36,000 miles, according to Consumer Affairs. This gives drivers an allowance of about 1,000 miles per month for the duration of the lease.
Typically, leasing a car will have prices that increase with the price of the vehicle you are leasing. Because car prices are getting higher, leases are struggling to find ways to lower prices to continue the flow of consumers that want to take on a lease in an effort to save money. For some, it might make sense to lease a car rather than commit to long-term ownership.
However, a low mileage car lease can be tricky. Lately, more car leases are offering deals for low mileage leases. What does that mean? It means that terms are marketed with lower pricing, but that doesn’t necessarily mean the lease is actually going to turn out cheaper for the lessee.
A low mileage lease is written to allow certain milage per year that is more in the ballpark of 10,000 miles per year rather than 12,000. While this may not seem like much, it can cost you. According to Bank Rate, the cost per mile when you go over is between 10 and 20 cents. While the lease terms don’t seem vastly different, that extra 2,000 miles per year could mean that you end up paying fees per mile for overage.
Is there such a thing as an unlimited mileage car lease?
Edmunds reports that you can alter the average auto lease. If you need more yearly miles than the standard 12,000, you can usually negotiate that into the lease terms. In fact, Edmunds says that its possible to sign up for up to 100,000 miles over a 3 year lease.
Overall, however, it’s better to pay up front for expected mileage. whether you negotiate higher milage or find yourself finagling a low mileage lease, it’s best to pay for miles initially. Either way, it’s all about avoid paying for miles over your lease terms. That’s where they get you.
Entering a low mileage lease agreement
If you are, in fact, a true low mileage driver it actually might work out for you to enter a low mileage car lease. But be sure you understand everything you are agreeing to. Read all the documents and learn how much the terms will charge you for any overage. While a lease isn’t for everyone, buying a new car isn’t for everyone either. Still, it’s best to do extensive research so that you understand all the ins and outs of what you are signing up for.