Lease Mileage Allowance.

In plain English

A lease mileage allowance is the number of miles per year you are allowed to drive a leased car without penalty, written right into the contract. Common allowances are 10,000, 12,000, or 15,000 miles a year. Drive more than the total over the lease term and you owe an overage charge, a flat per-mile fee, at the end. The allowance exists because more miles means the car is worth less when you return it, and the lease price was set assuming a certain amount of wear.

01Why it matters

If your real driving is higher than the allowance you picked, the per-mile charges can add up to a painful bill when you turn the car in, sometimes over a thousand dollars. Estimating your actual yearly mileage before signing protects you from that surprise.

02The math, step by step

Your lease allows 12,000 miles a year for 3 years, which is 36,000 total. You actually drive 45,000 miles. The Federal Reserve notes excess mileage charges typically run from 10 to 25 cents per mile or more, with the exact rate set in your contract. On 9,000 extra miles, even a 20 cent charge would be $1,800 due at lease-end.

03What this is NOT

04Receipts

Every figure on this page is sourced to a primary document. Tap to open the original.