Excess Mileage Charge: Going over your agreed mileage in a lease car or van

11 January 2021

What happens when you go over your agreed mileage?

You leased a car or a van and you declared your annual mileage. You made a good initial assumption but during your contract, your circumstances changed. Perhaps you moved house and now your car covers more mileage to get to and from work or maybe your business expanded and you now visit customers in cities far away from your home town. Things happen and sometimes you're not able to predict everything, but what does happen when you go over the agreed mileage on your finance contract? Often, there will be a review of the mileage amount and then a charge per mile you have exceeded. But don't panic!


You've gone over the mileage you agreed on your lease

While it may seem like a stressful situation, it's actually fairly common. Finance and leasing companies are used to getting the cars and vans with more miles on the clock than agreed. You may not face huge penalties above the excess mileage charge unless you go absolutely crazy and double your mileage limit!

We go through this process a lot at Commercial Vehicle Contracts, which is why we are going to explain exactly what happens when you exceed your agreed mileage on your lease.


What is the excess mileage charge and how does it work?

When you return the vehicle to the funder at the end of your contract, it will go through a process to establish its condition and this will include the odometer check. The finance company will then calculate how much over your agreed mileage you are and will charge you what is called an excess mileage charge. This charge is set in your finance agreement and should be checked before you sign the contract. Depending on your finance company and sometimes even vehicle model, the excess charge can range from around 6p to £1 plus VAT per each mile above your agreed limit. Some funders increase the excess mileage charge i.e your excess mileage can be 6p per mile for up to 10%  of the contracted mileage and then 9p for any extra miles.

For example:

Mr Smith had a Renault Kangoo ZE van on a 3 years contract with a yearly mileage allowance of 10,000. His total allowance for the duration of the agreement was therefore 30,000. At the end of the agreement, Mr Smith returned a van with 35,000 miles on the clock. As per his agreement, the excess mileage charge was 6p per mile so the finance company calculated Mr Smith had to pay £300 (5,000 miles x 6p) + VAT in excess mileage charges.


What about business excess mileage?

If you're a business customer and you've gone over your mileage allowance then again, there is a fee but you could offset it in other costs. The excess mileage charge is considered a service charge. This means that you can offset 100% of this charge against corporation tax, and also 100% VAT can be reclaimed on commercial vehicles and 50% - 100% on cars. We told you - it's not the end of the world! But do be sure to get a good idea of what you perceive your mileage to be before taking out a leasing contract and give the best estimation of your expected miles initially. This can, and often, changes the cost you'd be expected to pay and lower mileage doesn't always mean a cheaper monthly rental.

For further information, do not hesitate to get in touch for free, friendly advice from Commercial Vehicle Contracts.



Need Help?

Call Us Today

CVC are here to help every step of the way.

If you need help give us a call on:

01424 863 456
Head Office

020 3627 1127
London

0161 820 7808
Manchester

0121 314 2364
Birmingham

0117 911 0410
Bristol

Am I
Eligible?

We work in partnership with many of the UK’s leading van leasing, car leasing, contract hire and finance leasing funding companies in order to provide the most competitive rates and offer you the best leasing deals possible. Our guide to eligibility will help you understand the various requirements for establishing a vehicle finance agreement.

Our Vehicle
Ordering Process

Achieving the best van leasing deals and the best car leasing deals has become a key consideration in the work we do, so you can get the best leasing deals. Our process is built to ensure we accurately and efficiently identify your needs and requirements, achieve the best finance deal for you, apply for finance on your behalf and provide you with the quickest delivery possible.

Our First
Class Service

At Commercial Vehicle Contracts, we ensure that every aspect of the car leasing process and van leasing process is seamlessly undertaken with full management on your behalf, meaning you can sit back and relax with the peace of mind that your chosen vehicle will arrive at your desired address matching your required needs.

All Our Latest Offers & News

Sign up to our mailing list for our latest leasing deals and special offers on a wide range of vans and cars straight to your inbox!

Selected vehicles Select a vehicle to appear here Select a vehicle to appear here Select a vehicle to appear here Select a vehicle to appear here
Pricing
Basic List Price
Monthly Rental
Engine and Drive Train
Transmission Type
Engine Size
Engine Configuration
Fuel Type
Fuel Delivery Type
Gears
Axles
Emissions
CO2
Euro Emissions Standard
Electric Range
Combined (WLTP)
Fuel Consumption
Combined (WLTP)
Combined (NEDC)
Performance
Maximum Speed
0 to 60 mph
0 to 62 mph
Power (BHP)
Power (PS)
Power (KW)
Torque
Dimensions and Weights
Length
Width
Height
Wheelbase
Ground Clearance
Boot Capacity
Fuel Tank Size
Gross Weight
Kerb Weight
Max Braked Towing Weight
Max Unbraked Towing Weight
General
Body Style
Doors
Seats
Insurance Group
RFL Rate
Front Brakes
Rear Brakes
Standard Front Tyre Size
Standard Rear Tyre Size
Standard Spare Tyre Size