Buy or Lease by Mileage: The Honest Threshold
Mileage is the single strongest mechanical determinant of the lease-vs-buy decision. Mileage overage fees are a known, fixed liability that accumulates quietly during a lease and becomes due in full at turn-in. Understanding the math before signing is the only way to make an honest comparison.
The math on overages
Most standard leases are written at 12,000 miles per year. If you drive 15,000 miles per year on a 36-month lease, you will turn in 9,000 excess miles. At $0.25 per mile, that is a $2,250 bill due at turn-in - a single-check payment that is easy to underestimate when you are looking at monthly payments at signing.
The overage rate varies meaningfully by brand. A $2,250 bill at Honda rates ($0.15/mi) becomes the same 9,000 miles at $1,350. At Porsche rates ($0.30/mi), it is $2,700. These numbers are large enough to flip the lease-vs-buy decision on their own.
| Captive Finance Arm | Brand | Overage Rate |
|---|---|---|
| Honda Financial Services | Honda | $0.15/mi |
| Honda Financial Services | Acura | $0.20/mi |
| Toyota Financial Services | Toyota | $0.15/mi |
| Toyota Financial Services | Lexus | $0.25/mi |
| Subaru Motors Finance | Subaru | $0.15/mi |
| Nissan Motor Acceptance | Nissan | $0.15/mi |
| Nissan Motor Acceptance | Infiniti | $0.25/mi |
| Hyundai Motor Finance | Hyundai / Genesis | $0.20/mi |
| Kia Motors Finance | Kia | $0.20/mi |
| Ford Credit | Ford | $0.20/mi |
| Ford Credit | Lincoln | $0.25/mi |
| BMW Financial Services | BMW / MINI | $0.25/mi |
| Mercedes-Benz Financial | Mercedes-Benz | $0.25/mi |
| Audi Financial Services | Audi / VW | $0.25/mi |
| Porsche Financial Services | Porsche | $0.30/mi |
Indicative rates, April 2026. Confirm at lease signing.
| Excess miles (3-yr lease) | At $0.15 | At $0.25 | At $0.30 |
|---|---|---|---|
| 3,000 (1k/yr over) | $450 | $750 | $900 |
| 6,000 (2k/yr over) | $900 | $1,500 | $1,800 |
| 9,000 (3k/yr over) | $1,350 | $2,250 | $2,700 |
| 15,000 (5k/yr over) | $2,250 | $3,750 | $4,500 |
| 24,000 (8k/yr over) | $3,600 | $6,000 | $7,200 |
At under 10,000 miles per year, leasing is structurally efficient. Residual values are set by the Automotive Lease Guide based on a 12,000-mile baseline. If you drive 8,000 miles, the car depreciates slower than the residual assumes. The captive prices your monthly payment using that 12,000-mile depreciation curve - you are getting a bargain on your actual usage.
Low mileage also means the car at lease-end is worth more than the contract residual, giving you a potential buyout arbitrage opportunity. See lease buyout math for the comparison.
At 20,000 miles per year on a 12,000-mile lease, you accumulate 8,000 excess miles per year. Over 3 years, that is 24,000 excess miles. At $0.25 per mile: $6,000 due at turn-in, or an effective monthly-equivalent surcharge of $166 per month on top of the stated payment. The stated monthly payment is almost certainly lower than a loan payment on the same car - but the overage fee eliminates the advantage and then some.
A buyer at 20,000 miles per year takes steeper depreciation, but faces no penalty, no per-mile cost, and retains the resale value at any point. The car may be worth only $14,000 to $16,000 at year 5 compared to $20,000 at standard mileage, but the buyer avoids the cumulative overage cost entirely.
In the grey zone, the mileage overage math alone does not decide. Run the break-even calculator with your actual mileage and APR. At the standard 12,000-mile allowance, a driver doing 12,500 to 14,000 miles per year typically sees overage below $1,000 for the lease term - meaningful but not decisive. Ownership horizon and credit tier often outweigh the modest overage in this band.
Lease mileage allowances explained
Standard lease mileage packages are offered at 10,000, 12,000, or 15,000 miles per year. Choosing a higher package at signing typically adds $5 to $10 per month to the payment for each 1,000 additional annual miles - far cheaper than the turn-in overage rate. A driver who genuinely expects to do 15,000 miles per year and signs at 10,000 miles is paying the cheapest monthly rate but setting up a $0.25-per-mile liability that compounds over 36 months.
The honest advice: look at your last three years of actual mileage. Use the higher number, not the optimistic estimate. Add 10 to 15 percent for unexpected life changes (new job, school route, family changes). Pre-buying 3,000 extra miles at $0.08 per mile at signing costs $240 upfront; the same 3,000 miles at turn-in at $0.25 per mile costs $750.
Negotiating the overage rate at signing is sometimes possible, especially at luxury brands and for well-qualified buyers. Ask the F&I manager: “Can we set the overage rate at $0.20 instead of $0.25?” Get the answer in the written lease contract.