

Keep in mind that the average American drives around 18,000 miles a year. Although the monthly lease payments for high mileage leases tend to cost more than the standard leases, they may be helpful to those who are prone to racking up a ton of miles. There exist certain car leases called "high mileage leases," which give lessees several thousand additional miles to work with annually. In the U.S., the average cost is between 5 to 20 cents per mile over. If the lessee exceeds this limit, there will be a penalty charge per mile over the limit when the lease ends. In the U.S., standard auto leases generally allow annual mileage limits of 10,000 to 15,000, with most coming in at 12,000. Most leases will have a mileage cap, which is the maximum number of miles the car can be driven during the life of the lease. Therefore, auto leases tend to be more affordable for slowly-depreciating vehicles because they hold their residual values well. The difference between the price of the car minus residual value will result in the depreciation of the car after a lease, which is amortized throughout the lease loan. It is an estimation of the worth of the car at the end of the lease period. Financial institutions that issue lease contracts, not the dealers, set residual values on vehicles. In essence, the residual value of a car is the amount it can be bought for at the end of the lease.

Many leases allow the purchase of the leased vehicles through a purchase option agreement at a specified price once the lease ends. It can help to think of a car lease as a long-term car rental while car rentals generally last for as little as a day or even just a few hours, car leases average between two and four years. A car lease allows a person to drive a car for a fixed period of time as they make a down payment as well as monthly lease payments until the lease ends. Auto LeasesĪ lease is a contract allowing a party to convey property to another party for a specified time, usually in return for a periodic payment. For more information about or to do calculations involving leases in general, please use the Lease Calculator. The Auto Lease Calculator can help estimate monthly lease payments based on total auto price or vice versa.

Related Auto Loan Calculator | Lease Calculator
