Finance Lease Agreements – How to Accurately Calculate your Mileage.

When considering vehicle contract hire or finance lease agreements, be mindful of your anticipated annual mileage. Get this wrong and that fantastic deal may not be as fantastic as you think….

Making the simplest of mistakes or miscalculations can be extremely costly to you and/or your business. Simple elements like ‘excess mileage charges’ can spiral to £100s and sometimes £1000s that you simply did not budget for.

Ensuring the mileage is accurate is as important as ensuring that you select the correct and most cost effective funding method for your vehicle – If you get it wrong the outcome could be disastrous…

Calculate your Annual Mileage:

10,000 Miles per Annum Equates to:
833 miles per month or 192 miles per week
5-day working week: 38 miles per day
6-day working week: 32 miles per day
7-day working week: 27 miles per day

15,000 Miles per Annum Equates to:
1250 miles per month or 288 miles per week
5-day working week: 57 miles per day
6-day working week: 48 miles per day
7-day working week: 41 miles per day

20,000 Miles per Annum Equates to:
1666 miles per month or 384 miles per week
5-day working week: 77 miles per day
6-day working week: 64 miles per day
7-day working week: 54 miles per day

With excess mileage charges being on average 10 pence per mile – An additional 5000 miles’ miscalculation can cost in excess of £500 +VAT on a contract hire agreement. So accuracy will inevitably save you money at the end of the agreement.

Most of the major finance providers offer funding products that allow you the flexibility to set up the agreement to your exact requirements, budget and usage.

At the point of quotation, it is always best practice to discuss your wants and needs and ensure that the finance product is suitable.

The person quoting you for the vehicle has an equal responsibility to ensure that the agreement requested is suitable and the mileage is set exactly to your provided requirements (based on the information that you provide).

It is always prudent to take the time to discuss and allow for all your wants and needs.

This time could inevitably save you money……

Article kindly contributed by Lee Evans, Director, New Vehicle Solutions