One of the key considerations when taking out a lease is mileage, as the payments are based on a fixed annual allowance. Exceeding this annual allowance will result in an excess mileage charge, which varies depending on the vehicle, model and manufacturer. Our handy guide breaks down yearly mileages and excess mileage charges to help you keep on top of your leasing costs.
The total cost of your lease is determined by several factors; the value of the car, the estimated residual value at the end of the agreement, your annual mileage allowance, and the length of your lease. The mileage allowance you choose directly impacts your monthly payments, so it’s important to choose an amount that reflects your driving habits as accurately as possible. To work out your annual mileage, start with the fixed trips you’re likely to cover over the length of the agreement. If you’re a delivery driver who commutes 20 miles each way five days a week, that equates to around 10,000 miles per year.
For every mile driven for business purposes, there may be another you need to cover in your personal time. Take into account any other long journeys you’re likely to make – whether it’s travelling home for the holidays or across the country for an annual business conference. If you are confident that your driving habits will remain the same as previous years, the difference between the mileage recorded on your recent MOTs will give you a rough idea of the annual allowance you’re likely to need.
Your annual mileage limit will be agreed between you and the hire company before you take out the contract. At AMT, the mileage bands can be from 5,000 up to 50,000 miles depending on the funder.