WHAT IS THE RIGHT TERM
AND MILEAGE FOR ME
ON A LEASE ?
TERM
NEVER LEASE A VEHICLE LONGER
THEN THE MANUFACTURERS
STANDARD WARRANTY.
NEVER LEASE A VEHICLE LONGER
THEN THE MILEAGE LIMITATION
OF THE MANUFACTURERS
STANDARD WARRANTY.
THIS INCLUDES THOSE 39 MONTH
SPECIAL DEALS. IF THE WARRANTY
IS OVER AT 36 MONTHS, SO SHOULD
YOUR LEASE BE OVER AT
36 MONTHS.
MILEAGE
NEVER UNDERESTIMATE
THE MILEAGE YOU WILL DRIVE
DURING THE LEASE TERM.
I SHOULD SAY THAT AGAIN,
NEVER UNDERESTIMATE
THE MILEAGE YOU WILL DRIVE
DURING THE LEASE TERM.
THERE IS NO “FREE LUNCH”
ABOUT EXCESS MILEAGE CHARGES.
NO MATTER WHAT ANY SALESMAN,
SALES MANAGER, FINANCE
MANAGER TELLS YOU.
EXCESS MILESAGE MUST GET PAID
WHEN TERMINATING YOUR LEASE.
IF THE SALESMAN OR MANAGER
SAYS THEY WILL WAIVE THE OVER
MILEAGE CHARGES………………….
THEY ARE NOT WAIVING IT…………
THEY ARE SIMPLY BUILDING THE
EXCESS MILEAGE CHARGE INTO
YOUR NEW MONTHLY PAYMENT!
THESE ARE THE HARD FACTS!
HOW MANY MILES PER YEAR
IS RIGHT FOR ME ?
LOOK AT YOUR PAST DRIVING
HISTORY AND FIGURE IF YOUR
DRIVING HABITS ARE LIKELY
TO CHANGE IN THE NEXT
36 MONTHS.
NEW JOB, NEW HOME, ETC
THE STANDARD MILEAGE
ALLOWANCE FOR ALL LEASES
IS 15,000 MILES PER YEAR.
WHEN YOU TAKE 12,000 MILES
OR EVEN 10,000 MILES PER YEAR
YOU ARE GIVEN A CREDIT FOR
DRIVING THE LOWER MILEAGE.
HOWEVER, THE CREDIT YOU
RECEIVE IS SOME MUCH LESS
THEN THE PENALTY FOR DRIVING
MORE THEN THE 10,000 OR
12,000 MILES IT MAY NOT BE IN
YOUR BEST INTEREST TO ELECT
TO TAKE THE LOWER MILEAGE.
YOU DO NOT START PURCHASING
ADDITIONAL MILEAGE UNTIL AFTER
15,000 MILES PER YEAR WITH MOST
LEASING COMPANIES.
FORD, LINCOLN AND MERCURY
LEASES THROUGH FMCC DOES
NOT CHARGE “PER MILE” UNTIL
AFTER 19,500 MILES.
WHAT DOES ALL OF THIS MEAN?
THE STANDARD MILEAGE PER YEAR
ON ALL LEASES IS 15,000 PER YEAR.
IF YOU ELECT TO TAKE 12,000 MILES
PER YEAR YOU RECEIVE A 1%
CREDIT TIMES THE UPPER M.S.R.P.
10,000 MILES PER YEAR AND
YOU RECEIVE 2% CREDIT.
IF THE UPPER M.S.R.P. IS $30,000
YOU RECEIVE A $300 CREDIT
FOR 12,000 MILES PER YEAR OR
A $600 CREDIT FOR 10,000 MILES.
THE WAY THIS HAPPENS IS THE
RESIDUAL VALUE (THE VEHICLES
VALUE AT THE END OF THE LEASE)
IS RAISED UP BY $300 OR $600
THUS LOWERING THE AMOUNT
OF DEPRECIATION.
THE RESULT
LOWERS YOU MONTHLY
PAYMENT BY $300 OR $600
DEPENDING ON WHETHER
YOU SELECTED 12,000 OR
10,000 MILES PER YEAR.
IF YOU DRIVE MORE THAN THE
12,000 OR 10,000 MILES
WHAT HAPPENS ?
12,000 MILES FOR THREE YEARS
TOTALS 36,000 MILES. IF YOU
DRIVE 15,000 MILES PER YEAR
BUT YOU ELECTED TO TAKE 12,000
MILES PER YEAR YOU HAVE DRIVEN
9,000 MILES IN EXCESS MILEAGE
CHARGES. EXCESS MILEAGE
CHARGES ARE BETWEEN
15 – 25 CENTS PER MILE
DEPENDING ON THE MSRP
OF THE VEHICLE.
9,000 MILES TIMES $.15 = $1,350
A MILEAGE PENALTY OF $1,350.00
YOU ONLY RECEIVED A $300 CREDIT!
NOT A GOOD DEAL FOR THE
CONSUMER UNLESS YOU KNOW
FOR SURE YOU WILL NOT EXCEED
12,000 MILES PER YEAR.
10,000 MILES FOR THREE YEARS
TOTALS 30,000 MILES. IF YOU
DRIVE 15,000 MILES PER YEAR
BUT ELECTED TO TAKE 10,000
MILES YOU HAVE DRIVEN 15,000
MILES IN EXCESS MILEAGE
CHARGES
15,000 MILES TIMES $.15 = $2,250
A MILEAGE PENALTY OF $2,250.00
YOU ONLY RECEIVED A $600 CREDIT!
NOT A GOOD DEAL FOR THE
CONSUMER UNLESS YOU KNOW
FOR SURE YOU WILL NOT EXCEED
10,000 MILES PER YEAR.
PURCHASING ADDITIONAL MILEAGE
MORE 15,000 MILES PER YEAR AT THE
BEGINNING OF THE LEASE IS ALWAYS
CHEAPER THEN PAYING AT THE END!
DEPENDING ON THE M.S.R.P. OF THE
VEHICLE TO PURCHASE EXCESS
MILEAGE AT THE BEGINNING OF
THE LEASE IS USUALLY SET UP
AS FOLLOWS:
M.S.R.P. |
BEGINNING |
END |
< $30.000 |
$.15 |
$.20 |
$30K - $50K |
$.20 |
$.25 |
> $50,000 |
$.25 |
$.30 |
AS YOU CAN SEE IT IS
LESS EXPENSIVE TO PURCHASE
EXCESS MILEAGE AT THE BEGINNING
OF THE LEASE RATHER THAN TO
WAIT AND PAY THE EXCESS
MILEAGE CHARGES AT A
HIGHER RATE!
THE DOWN SIDE OF PURCHASING
EXCESS MILEAGE UP FRONT IS THAT
IF YOU DO NOT USE THE MILEAGE
PURCHASED YOU DO NOT GET ANY
MONEY BACK FOR BRING THE
VEHICLE BACK WITH LESS MILEAGE.
THERE IS ONE EXCEPTION
FORD MOTOR CREDIT CORP
WHEN YOU LEASE A FORD, LINCOLN
OR MERCURY VEHICLE FMCC HAS A
UNIQUE METHOD OF CALCULATING
THE RESIDUAL VALUE FOR THE
MILEAGE INTERVAL WHICH
BENEFITS THE CONSUMER
GREATLY.
ALL RESIDUAL VALUES COME
WITH A STANDARD 15,000 PER
YEAR AS EXPLAINED ABOVE.
THE CHART BELOW EXPLAINS
HOW FMCC HANDLES MILEAGES
Miles Per Year |
+ / - The 15K Residual |
10,500 |
+ 3 Points |
12,000 |
+ 2 Points |
13,500 |
+ 1 Point |
15,000 |
Standard Miles No Change |
16,500 |
- 1 Point |
18,000 |
- 2 Points |
19,500 |
- 3 points |
After 19,500 Miles any Extra Mileage is Purchased on a CENTS PER MILE
basis as illustrated above |
WHAT MAKES
FORD MOTOR CREDIT CORP
UNIQUE IS THAT ANY MILEAGE
PURCHASED UP TO 19,500 MILES
AND IS NOT USED DURING THE
LEASE THE CONSUMER RECEIVES
A REFUND OF THE UNUSED MILES.
THERE IS NO REFUND FOR
MILEAGE PURCHASED OVER
19,500 AND NOT USED.
THIS SYSTEM OF PURCHASING EXCESS
MILEAGE REALLY DOES BENEFIT THE
CONSUMER WHO DRIVES BETWEEN
15,000 AND 19,500 MILES PER YEAR.
4,500 MILES TIMES 3 YEARS EQUALS
13,500 MILES A CONSUMER IS ONLY
PAYING 3% POINTS OF THE UPPER
M.S.R.P. AS OPPOSED TO PAYING
15 OR 20 CENTS PER MILE.
THIS IS A HUGH SAVINGS.
ASSUMING THE M.S.R.P. TO BE
$30,000 TIMES 3% POINTS = $900
ONLY $900 ADDITIONAL TO DRIVE
19,500 MILES PER YEAR.
AS OPPOSED TO PAYING 15 CENTS
PER MILE. 13,500 MILES TIMES
$.15 = $2,025.00
THAT IS A SAVINGS OF $1,125
FOR THE CONSUMER!
BEWARE OF SALESPEOPLE
WHO TRY TO CHARGE YOU
CENTS PER MILE
WHEN LEASING A FORD, LINCOLN
OR MERCURY PRODUCT.
THEY MAY TRY AND OVERCHARGE
YOU AND KEEP THE $1,125
AS ADDITIONAL
COMMISSIONABLE PROFIT.
