Annual mileage, in the context of car leasing, refers to the maximum number of miles a lessee can drive the leased vehicle within a one-year period without incurring additional fees or penalties. When signing a car lease agreement, both parties typically agree on a predetermined annual mileage limit based on the lessee's anticipated driving habits and needs. Exceeding the agreed-upon mileage limit can result in excess mileage fees, which are typically charged on a per-mile basis and can accumulate over the lease term.
It is essential for lessees to accurately estimate their annual mileage requirements at the beginning of the lease term to avoid potential financial penalties at the end of the lease. While some leasing agreements allow for adjustments to the mileage limit during the lease term for an additional cost, it is generally more cost-effective to choose a mileage limit that aligns with your anticipated driving habits from the outset.