What “Mileage allowance” means
Every lease has a mileage allowance tied to its residual value: more miles means a lower residual and a higher payment. The contract lists the total allowed (for example, 36,000 miles over three years) and the excess-mileage rate, commonly around 15 to 30 cents a mile.
Buying extra miles up front is usually cheaper per mile than paying overage at the end, and unused prepaid miles are sometimes refundable depending on the lessor.
How it shows up at the dealership
Low-mileage leases make advertised payments look smaller. A dealer may quote 10,000 miles a year unless you say otherwise. Tell them your real driving before they run numbers.
If you end up well under your allowance, most leases don’t pay you back for unused miles. That’s one more reason to choose an allowance that matches your real driving rather than the lowest one offered.
Worked example · illustrative numbers, not a quote
Going over on a 36-month, 12,000-mile lease
| Allowed | 36,000 miles |
| Actually driven | 41,000 miles |
| Overage | 5,000 miles |
| At $0.25 per mile | $1,250 at turn-in |
If you know you drive 14,000 a year, buying 15,000-mile allowance up front is often cheaper.
What to do
- Check your last two years of mileage before choosing an allowance.
- Ask the price of each allowance option, both monthly and per mile.
- If you’re going over mid-lease, consider a lease-end buyout or trade instead of paying overage.
What to say
“I drive about 14,000 miles a year. Please quote this at 15,000 miles and tell me the excess-mile charge on the contract.”
Also called: lease miles, annual mileage limit.