It happens more often than people expect. You sign a lease with the best intentions, thinking 12,000 miles a year seems like plenty. Then life changes: a new job with a longer commute, more weekend trips, a move across town. The miles add up quietly, and by the time you're approaching the end of your lease, the damage is already done. At anywhere from $0.15 to $0.30 per mile depending on your brand, going even a few thousand miles over can cost you hundreds. Go tens of thousands over and you're looking at a hefty bill. Here’s one way to get out of it. In a video with around 5,000 views, Michael Dega (@deganxdhy5), general sales manager at Mercedes-Benz of Novi, walks through the situation with a real customer situation where he’s trying to work things out to help them pay less. The customer is 22,157 miles over on their lease, which works out to $5,539 in overage fees. With the lease ending in under a month, they're running out of time to do something about it. "That's big, that's pretty ugly," Dega says. Rather than just hand the car back and eat the fees, they look at the car's trade-in value instead. The car is worth $18,000 as a trade, but the lease payoff sits at $20,082, meaning the customer is $2,082 upside down. Still, compared to $5,500 in mileage penalties, that's significantly less to pay. "It's definitely the cheaper way to go for this customer is to look at a trade," he explains. "That's always the best way in this particular case." Commenters were torn between being grateful for the tip and unimpressed with leasing in general. Tell us what you think! View Comments “Not too bad. I’d do a trade,” wrote one, while a second groused, “Leasing a car is just dumb.” A third wondered how the driver got in that position in the first place. “22k over on mileage....someone wasn't aware of how much they drive,” they opined. Why Do Leases Have Mileage Limits? Before getting into the overages, it helps to understand why mileage limits exist at all. According to Capital One, your monthly lease payment is essentially based on the difference between the car's purchase price and its expected value at the end of the lease term, what's called the residual value. More miles mean more depreciation, and more depreciation means a lower residual. The mileage limit is how the leasing company protects that calculation. Most leases cap drivers at 12,000 or 15,000 miles per year. Some brands offer more flexibility. NerdWallet notes Ford, for example, offers limits anywhere from 7,500 to 19,500 miles annually. And importantly, it's the total over the full lease term that counts, not how you distribute the miles year to year. Drive 19,000 miles one year and 1,000 the next on a 20,000-mile two-year lease, and you're fine. What To Know About Lease Mileage Overages Per-mile overage charges typically run between $0.15 and $0.30 per mile depending on the brand, according to LegalClarity, and that rate is locked into your contract before you ever drive off the lot. Mainstream brands like Honda and Toyota tend to sit at the lower end of that range, while luxury marques like BMW, Mercedes, and Audi can hit $0.25 to $0.30 per mile. The math adds up fast. At $0.25 a mile, 22,000 miles over means roughly $5,500, which is almost exactly what the customer in the video is facing. So why does trading it in sidestep the fee? Because overage charges only apply when you return the car. A trade-in is essentially a buyout: the dealer pays off the lease balance to the leasing company, takes possession of the vehicle, and applies whatever trade value they've assigned it toward a new deal. As TrueCar explains, if the car is worth more than the buyout price, the customer pockets the difference. If it's worth less, that gap gets rolled into the new financing. Either way, the mileage penalty never comes into play. The car is sold, not returned. It's not the only option, either. Capital One notes that some lessors will extend a lease by six to 12 months, adding miles to the original allotment. And some dealerships will waive overage fees outright if you sign a new lease. Motor1 reached out to Dega for comment via TikTok direct message and comment. We'll be sure to update this if he responds. We want your opinion! What would you like to see on Motor1.com? Take our 3 minute survey. - The Motor1.com Team
+47 others
