Attractive Leases Mean Lower Mileage Caps In Exchange For Low Payments
Leases are red-hot these days, but those signing up for temporary ownership of their rides will be facing lower mileage caps in exchange for low payments.
According to Experian Automotive, 31 percent of all U.S. new-car sales during Q1 2015 were leases, CarsDirect writes, with monthly payments entering the sub-$150 range for small cars after paying $1,999 at signing, $199/mo. for midsize models upon cutting a check for the same amount at the dealership.
However, those deals are coming with a price: in order to keep residual values healthy, annual mileage caps are being trimmed.
The publication looked over the mileage caps of 300 leases, finding the average cap figure came to 10,900 miles per year; Edmunds adds caps have fallen below 11,000 miles/year for the first time ever in Q1 2015. One lease advertised by General Motors dropped the cap from 12,000 miles/year in 2014, to 10,000 miles this year, with the now-extra 2,000 miles amounting to $1,500 for a three-year agreement plus an overage fee of 25 cents/mile.
CarsDirect says concerns over caps aren’t a new thing, akin to data caps on smartphone plans, but adds consumers should keep the new lower caps in mind, lest they end up spending more money than originally thought.
[Photo credit: Sunset Chevrolet/ Facebook]
Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.
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Teaser lease deals seem to be the majority of local dealer tv and print adverts these days. I'm waiting for (but still haven't seen) one for $0 per month with the $3000 down payment in the unreadable fine print.
10K would work for me. And my mom. And my wife. We at best average 12K on one car. But remember, anxious off-lease buyers, it takes about $150 and 5 minutes to set the electronic odometer to any desired number.
"Leases are cheaper when there's a lower mileage cap!" And in other news, "The sun rises in the east!" Thanks, TTAC.
I can't seem to even keep my teenagers under the 12k per annum limit...no more leases when these are over...gonna go back to buying old European cars and driving them until they simply rust to bits. I have bought two old Volvos this year, spent minimal money to buy them, spending money as needed to keep them in good working order, and we can drive all we want.