Excess mileage charges are fees incurred when you lease a vehicle, and you exceed the mileage limit specified in your lease agreement. Here's how they typically work:
Mileage Limit:
When you lease a vehicle, you agree upon a set mileage limit as part of your lease contract. This limit is usually expressed in terms of miles per year, such as 10,000, 12,000, or 15,000 miles annually. This limit is set based on your estimated driving needs. Your mileage is checked at the end of the contract term so as long you stay under the total mileage amount (Number of Years x Annual Mileage) you will not have to pay any excess mileage charges.
Exceeding the Mileage Limit:
If you drive more miles than the agreed-upon limit during your lease term, you will be charged for each mile you go over that limit. The excess mileage fee is predetermined and outlined in your lease agreement. This is typically between 5p and 15p a mile and is paid once the contact has ended. So, in the 5p scenario, for every 1000 miles over the agreed mileage, it will cost the driver £50.
It's important to be aware of the mileage limit in your lease agreement and to monitor your mileage throughout the lease term to avoid excess charges. Many Funders allow you to "re contract" the mileage, if you feel that the agreed mileage is no longer going to be appropriate. This typically can happen 6 months after the start of the agreement and up to 6 months before the end of the agreement. And the monthly payment will change to reflect this change.
