Beth Weir
14 August 2025
If you’re considering leasing a vehicle, one of the first decisions you’ll need to make is how many miles to include in your contract. It’s a detail that can have a big impact on your monthly payments and your costs at the end of the agreement.
We see many people who are new to leasing either just guessing or going with the dealer’s suggestion without fully understanding the implications. This can sometimes lead to paying more money every month than you need to.
To put your mind at ease, we’ve prepared some top tips for choosing the right mileage that even some leasing veterans aren’t aware of.
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Why does mileage matter in leasing?
Your annual mileage estimate influences several key decisions. When arranging car insurance, you’ll need to tell your provider how far you expect to drive each year. As a general rule, higher mileage usually means a higher premium, while lower mileage can result in cheaper cover as insurers see you as less of a risk.
It should go without saying, but if you’re arranging the insurance yourself, never be tempted to underestimate your mileage to get a lower rate. Doing so could invalidate your policy and leave you without protection.
When you take out a lease, the funder estimates what your car will be worth when it’s returned, based partly on the mileage you’ve agreed. For example, if you sign up for 10,000 miles per year over three years, the funder expects the vehicle back with 30,000 miles on the clock.
If you drive significantly less than this, only the funder benefits. They can resell the car for more, while you’ve paid for miles you didn’t use. If you drive more, you’ll usually pay an excess mileage charge.
Is this different for electric vehicles?
Mileage is undoubtedly a big factor when deciding whether to lease an electric vehicle (EV). Many drivers hesitate over EVs, worrying the range won’t keep up with their lifestyle. The numbers, however, tell a different story. Research by CAP HPI shows that used EVs average 8,292 miles per year, which works out to about 159 miles a week.
With most modern EVs offering an average range of 250 – 300 miles on a single charge, you can comfortably cover a typical week’s driving without needing to plug in daily. The data makes it clear: for most drivers, an EV’s range more than meets the mark.
Finding out your ideal mileage
The key is accuracy. Start by working out your typical weekly mileage, then multiply it by around 45 weeks of the year to allow for holidays or occasional weeks where you drive less. Factor in long trips, for example, if you drive across the UK for your summer holiday or are partial to a European road trip, include that in your estimate.
To set the scene, you can view the official annual mileage figures from the Government’s Department for Transport (DfT) by clicking here.
For most people, mileage tends to fall between 8,000 and 10,000 miles per year, but some drivers may do as little as 5,000 or as much as 20,000–25,000. The important thing is that you base your figure on your real-life driving habits, not a guess.
One of the simplest and most accurate ways to check your mileage is by looking at your annual MOT certificate. It records your car’s mileage on the day of the test, and by comparing it with previous years, you can see exactly how many miles you’ve driven.
Misplaced your MOT certificate? You can request a free replacement online by clicking here.
What about a lease with unlimited mileage?
These situations are extremely rare, and if they weren’t, the costs would be astronomical. It’s challenging for the funder to put a price on them, as they must factor in the vehicle’s future value once it’s returned.
What happens if you exceed your allocated mileage?
If you drive more miles than agreed in your lease, you’ll face an excess mileage charge when the contract ends.
Although we talk about ‘annual mileage’, this fee isn’t applied each year; it’s based on your total mileage over the full term of the agreement. For example, if you take out a three-year lease at 5,000 miles per year (15,000 miles in total) and return the car with 16,000 miles on the clock, you’ll pay for the extra 1,000 miles.
The rate is calculated on a pence-per-mile basis, usually between 3p and 30p, depending on the vehicle and your specific agreement. There’s no universal calculator, as charges vary with each contract, but your exact rate will be clearly stated in your paperwork and confirmed before you sign.
At P+B, our Relationship Managers take the time to discuss your driving habits in detail, helping you choose the mileage that’s right for you.
Don’t overpay for ‘buffer miles’
Many new customers think it’s safer to build in a mileage buffer. However, with leasing, there’s no upside to paying for mileage you don’t use. You might not think it, but it’s often better to slightly underestimate and pay for any extra miles you drive, especially as excess mileage charges can be surprisingly reasonable on some vehicles (as low as 5p per mile, or even 2.5p in rare cases). That means the odd extra trip won’t break the bank.
Can I adjust my miles during my contract?
While it’s important to get your mileage right when you order the vehicle, your mileage isn’t set in stone. Most lease agreements allow you to amend your mileage between 6 months and 6 months before your contract ends. If your driving habits change, maybe you’ve taken up remote working or added a longer commute, speak to your Relationship Manager or our Client Services team. We can advise whether it’s worth adjusting your contract to avoid a big bill at the end against any potential admin fees.
Beware of low-mileage ‘deals’
Ever spotted an online leasing deal that’s far cheaper than the rest? Look closer. Some providers deliberately set or advertise a contract at a lower mileage to make the monthly payment look more attractive. This can backfire badly and leave you with a hefty excess mileage bill. Always make sure your mileage is realistic from the start.
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In short: get your mileage right, review it partway through, and don’t pay for more than you need. With our guidance, you’ll avoid costly surprises and make the most of your leasing agreement.
Our Relationship Managers are here to help you choose the right car, the right contract, and the right mileage. Using our industry-leading Fact Find process, we’ll ensure you drive away in a vehicle perfectly suited to your needs, at a competitive price. Speak to our team today to get started.
