Truck Lease and Extra Miles

I’m thinking of leasing a brand new truck. I know that in the past the word “lease” has been a dirty one. But, now that they give you the purchase price that the truck would sell for at the end of the lease term up-front before you sing the paperwork, the FW and I have been considering it. My question is, if we choose to buy the truck at the end of the lease, does anyone know if we go over the miles (36K for three years, for example) do we still have to pay the penalty per mile? I believe it’s .25 per mile….

No, if you buy it the miles do not need to be paid, only if you turn it back in.

Nope. Only if you turn it in. (at least with a General Motors Lease) Should be the same with most other OEM’s.

However, I typically wouldn’t recommend going into a lease planning to buy it at the end.

Lease agreements are the same as purchasing a vehicle. The monthly payment is calculated from the negotiated purchase price and includes the final payout. Lease terms, price, length of contract is all negotiable the same as when you purchase a vehicle. The answer above is correct, you typically don’t pay for the mile overage when you purchase the vehicle, but be sure and read the entire contract.

To add to the others comments, if you go over the miles or for some other reason the truck isn’t worth what the “buyout” price is at the end of the lease you could be in a pickle getting financing to actually purchase it.

onestout wrote:

The answer above is correct, you typically don’t pay for the mile overage when you purchase the vehicle, but be sure and read the entire contract.

This ^^^^. Make absolutely sure you have personally seen and read the part of the contract that spells this out.

Back when leasing was all the rage, I had a string of co-workers screw themselves over because they didn’t read/understand the fine print. This was the main reason leasing got a bad name.

With today’s finance rates, I cannot see how leasing with the intent to buy at the end of the lease could possibly make sense for a personal vehicle purchase. Obviously, if this if for business use, it’s totally different.

Not to pry, but I’d be interested to know how you see this as making financial sense? If you’re using a low lease price to get into a truck you can’t afford as an outright buy, I see red flags all over that situation. There’s about 42 different ways from Sunday that you can screw yourself on that. CaptianMusky points out the #1 reason: Are you really, really, really SURE you’ll be able to get (and afford) the loan at buyout time? If not, then you just paid 3 years of lease payments and have nothing to show plus you could be on the hook for mileage overage.

Vehicles are expenses, NOT assets. Be careful.

Grouse

I’m in the process of buying out my lease on a 2015 Sonata right now. We went this route because 1) three years ago, we needed a reliable car right away, 2) with two kids in daycare, we needed a very specific payment number to fit our budget, and 3) I knew we’d still need a reliable car after the lease but when the budget loosens up a bit.

I knew it wasn’t the most efficient route at the time but I was constrained and I felt it was my best choice. I’m also paying about $1200 extra on the purchase price of this vs walking onto a lot right now and buying a similar make/model but I look at it as the price I’m paying for the convenient solution I received three years ago and I was clear eyed about that going in on the front end.

Completely agree that a vehicle is an expense, not an asset and I prefer to buy vs lease at all times but this worked out OK for our particular scenario, albeit with the added expense today listed above.

The one other thing I’ll mention is that the dealership drives your monthly lease price down by leaving you a larger buyout at the end. Hope this helps, good luck.

I really think leases make sense for people who are low mileage drivers (and don’t want to purchase at the end of the lease). If you’re going into a lease knowing you may go over the miles, it’s a bad choice IMO.

I leased a 2014 Durango, my van died after 14 years right before our vacation to Leech and I needed something right now. Not knowing what I wanted I decided to lease, planning to turn it in at the end of 36 months and buy new. I only drive about 8000 miles a year and it turned out to be one of the best vehicles I ever drove. Long story short, I ended up buying it. After figuring out the total cost it cost me about the same as buying with financing. It worked out ok for me but read the fine print, you might not be so lucky.

Thank you for the information. We both have good jobs, credit, and are in excellent financial shape. She doesn’t drive many miles at all for work, but we travel about an hour north to the cabin nearly every weekend. I am a teacher so there’s not much driving involved for me in the summer months. We are just kicking around ideas and that was one of them, but the mileage thing was a concern of both of ours. I think, for the moment, we are leaning toward buying/financing one instead of leasing, but that may change as it’s HER turn to have a new vehicle

Make sure to check around on the rebates. I just bought a new Silverado and the first place we went did not allow all the rebates in the price. If you know someone that works or has retired from the brand you are looking at see if you can use there purchase plan. For us that alone was worth 5000.00.

I think you will find cost of ownership to be similar between the two on new vehicles. If saving money on EVERYTHING is your thing then buy used.
We have had a mix of owned and leased vehicle for many years. We spend a premium to always have newer reliable vehicles and it has paid off with no break downs that I can recall.

ive thought about doing this exact same thing for the same reasons – lower payment for the first 3 years, ignore the mileage limitations and buy it outright after the lease is up. It makes sense to me to do that if the overall cost comes out to be the same but if it doesn’t work out that way, or at least close, then I wouldn’t do it.

At the end of the day I just keep doing what ive always done and drive beaters into the ground. Proud to say ive spent a total of less 5k in total cost on vehicles in the last 10 years and ive never been stranded or unable to do stuff like ice fishing/hunting/boating. you’d be surprised how much life is left in vehicles other people have given up on. Just gotta put up with the rust and the noises and can get a lot of miles outta other peoples rejects. Vehicles are indeed expenses.