Under a standard car lease, the consumer agrees to make a monthly payment for the privilege of driving the car a certain number of miles agreed to in the contract, usually 12,000 or 15,000 per year. At the end of your lease term, if you exceed the mileage permitted under your contract, you are typically required to pay for your “excessive use”. This cost is provided in the lease and is generally around 15 to 20 cents for each mile that exceeds the maximum contracted mileage. But what happens when you’ve driven less than your contracted number of miles? Surely the leasing company provides a refund for the value of these unused miles, or a credit against other end of lease charges, right? Don’t count on it.
While car leases explicitly provide for the imposition of additional fees when the lessor exceeds the permitted mileage on a lease, they are less inclined, or not inclined at all, to provide a refund or credit for unused miles at the end of a lease. Some leasing contracts specifically address the treatment of unused miles. For example, the 2010 Nissan car lease clearly provides that “[t]here will be no refund for unused miles, including any additional miles purchased by you.” This explicit provision puts the consumer on notice that no refund will be given for unused miles and by signing the lease, the consumer agrees to that term.
However, that contractual language is not universal in the car leasing business. As a result, many consumers are paying for mileage they are not using while the car companies are reaping the dual benefits of receiving payment for unused mileage, and receiving a car at the end of a lease with less wear than expected. One example of this windfall is the 2010 Honda lease. Like most leases, the Honda lease goes into great detail about additional charges for excess wear and tear, including a 20 cent per mile charge for exceeding the maximum mileage allowed under the lease. However, the lease is silent with respect to refunds or credits for unused miles. As a result, the consumer pays for miles he or she has not used and Honda receives payments for unused mileage and a car with less wear and tear.
As always, consumers should read car leases and other contracts carefully so they understand their rights and obligations under those contracts. But where, as with the Honda lease, the contract does not disclose an important term, there is the potential that consumers are paying more than they should for their leases.
If you or someone you know has returned a leased vehicle at the end of a lease term with unused mileage and the applicable lease is silent with respect to the treatment of unused mileage, please contact us to discuss your legal rights.