Do You Require a Different Lease Type?
A new car purchase is exciting, but if you're not careful, it can also be challenging, annoying, and expensive. There are numerous questions that need to be addressed, one of which is whether to purchase or lease. If you opt to lease, think about whether a high-mileage lease might be the best option for you.Purchase vs. Lease
Both purchasing and leasing a new car have benefits and drawbacks. The best option largely depends on the person's preferences and driving style. For instance, if you prefer the idea of driving a new model every two to three years or so, leasing is probably your best option. However, it is probably best to buy if you can't get over the feeling that you don't own the car you are driving. The mileage factor is another significant factor that is frequently disregarded. People who plan to drive a lot might decide that leasing is the best option because they think it is better to put a lot of miles on a car that they will soon be turning in and not have to worry about. However, standard leases have annual mileage restrictions, and if a lessee exceeds the limit, it may result in expensive extra fees.Explanation of Mileage Limits
Normal auto leases have annual mileage restrictions of 10,000–15,000 miles, with the majority having 12,000-mile restrictions. According to data from 2018, the typical American driver puts 13,500 miles on their car each year, so for the majority of people, a standard auto lease works well. Drivers who exceed their allotted annual mileage must pay $0.10 to $0.25 in additional per-mile fees. That might not sound like much, but if you frequently exceed the annual mileage cap by a significant margin, your lease costs could significantly increase. The high-mileage lease may be able to solve some of these problems, which is good news.Concerning High-Mileage Leases
High-mileage leases are those that were written with a higher initial mileage cap, typically 18,000–20,000 miles. This way, the lessee can travel farther each year without paying those pricey extra-mile fees. The drawback is that your monthly lease payments will increase. In light of the trade-off between higher monthly bills for a high-mileage lease and additional per-mile charges for a standard lease, is a high-mileage lease worthwhile? In most cases, the answer is yes. What matters in this situation is the end result. The more you drive toward the mileage cap, the more you will save with a high-mileage lease. On the other hand, if you think you'll only go over a standard lease's mileage limit by a few hundred miles, a standard lease and the extra per-mile fees are probably better for you.Get a High-Mileage Lease: How to Do It
All you need to do is request a high-mileage lease option; most major dealers offer one or more of them. The model or location are just two examples of the variables that may affect availability. The devil is in the details, so make sure you have taken the time to calculate as precisely as you can how many miles you intend to drive the car each year and that you are aware of all the conditions of the proposed lease. Before logging on, you should run the numbers through your calculator. Don't be afraid to haggle over terms like the monthly payment, annual mileage cap, and over-the-limit per-mile fees. When it comes to the terms of the lease, lessees regularly have some wiggle room. In this manner, you can adjust the final costs to benefit you.Leases with High Mileage and Extended Warranties
Another thing to think about is purchasing an extended warranty for your brand-new, recently leased car. Consider signing a three-year, high-mileage lease on a new car with a warranty that lasts three years or 36,000 miles. That works out to 12,000 miles annually, so if you plan to drive your car more than that—which is what a high-mileage lease is for—you will have a time when the car is out of warranty during the last part of your lease. As a result, you'll be responsible for paying for any additional repairs and maintenance, which could get expensive given the vehicle's high mileage by that time. It's a compelling argument in favor of paying upfront for the extended warranty.Main Points
- If you choose to lease a vehicle rather than purchase one, a high-mileage lease may be a better choice for you.
- Standard leases have annual mileage caps; if the lessee exceeds the cap, they will be charged an extra per mile.
- High-mileage leases are written with higher mileage caps for lessees who drive more frequently. However, be prepared for higher monthly payments.
Questions and Answers (FAQs)
How do auto leases function?
When leasing a car, you pay a down payment and return the car at the end of the lease term. The initial payment is typically made, and subsequent payments are determined by how much the vehicle depreciates over the course of the lease. In most leases, the mileage is restricted, and going over that limit incurs a fee per mile.How long do auto leases last?
The typical length of a car lease is two to four years. The length of the lease and any fees you will be responsible for at the end will be specified in your lease agreement. You might owe more money when you return your car if you break the lease's terms.