What happens if I go over my mileage on a lease?
If you drive more than the total mileage in your contract, the funder usually charges an excess mileage fee when the vehicle goes back. The fee is a set amount for each extra mile, and the rate is stated in your agreement. Check it before you sign.
The detail
How the charge works. Business contract hire is priced on an agreed mileage allowance, normally given as a yearly figure and applied across the whole term. The funder estimates what the vehicle will be worth at the end based on that mileage. Extra miles reduce that value, so the contract includes a per-mile charge for them.
When you pay it. Excess mileage is normally assessed when the vehicle is collected or returned, and invoiced afterwards. It is not usually added to your monthly rental along the way.
Total, not year by year. The allowance is usually measured across the full term. Driving more than the yearly figure in one year does not automatically cause a charge if you finish the term within the total. Check your agreement to confirm how your funder measures it.
The rate varies. The per-mile rate depends on the funder, the vehicle and the contract. It is set out in your quote and agreement, so read it before you commit.
Unused miles. Finishing under your allowance generally does not earn a refund. Paying for more mileage than you need can cost more than necessary, so it is worth estimating your real use before choosing.
If your needs change. If you expect to go over part-way through the term, contact the funder early. Some will consider changing the allowance, but this is at their discretion and may change your rental. It is usually cheaper to deal with it before the end than to wait for the final invoice.
Other return charges. Excess mileage is separate from charges for damage beyond fair wear and tear. Both can be assessed at the same inspection.
Who sets the terms. Contract hire agreements are with the funder. Swiss Vans Ltd is a credit broker, not a lender, and does not set mileage rates or charges.
A worked example
This example uses no real figures, so you can apply your own.
- Find the total mileage allowance in your agreement. If it is given per year, multiply it by the number of years in the term.
- Read the final odometer figure at the end of the contract.
- Subtract the total allowance from the final reading. The difference is your excess miles. If it is zero or negative, there is no excess mileage charge.
- Multiply the excess miles by the per-mile rate shown in your agreement. The result is the excess mileage charge before any other return charges.
For example, if the allowance across the term is a certain number of miles and you return the vehicle some miles above it, you pay the per-mile rate for each of those extra miles and nothing for the miles within the allowance.
Related questions
- How do I choose the right annual mileage for a business lease?
- Can I change my mileage allowance during the contract?
- What counts as fair wear and tear when I hand a vehicle back?
- What happens if I want to end a contract hire agreement early?
Questions people ask
Is the excess mileage rate fixed when I sign?
The rate is stated in your agreement, so you should know it before you commit. Ask the funder or your broker to point it out if it is not clear in your paperwork.
Can I avoid an excess mileage charge?
You can reduce the chance of one by choosing a realistic allowance at the start and tracking your mileage during the term. If you are heading over, ask the funder early whether the allowance can be changed. They are not obliged to agree.
Do I get money back if I drive fewer miles than allowed?
Generally not. The rental was set using your agreed allowance, so unused miles are not usually refunded. Your agreement will state the position.
Does going over my mileage affect my credit file?
An excess mileage invoice is a charge under the agreement, and unpaid balances could lead to problems. Ask the funder how they handle it, and contact them promptly if you have trouble paying.