Mileage Allowance
Definition
- The number of miles a leased vehicle can be driven over the life of the lease. Mileage allowance is detailed in the lease agreement. Also known as a "Mileage Limitation."
Synonyms
distance allowed, mileage cap, mileage limit
Alternate Spellings
Mileage Limitation
Related Terms and Acronyms
- Capitalized Cost — Definition,
- A leasing term that refers to the price of the car. The lower the capitalized cost, the lower the monthly lease payment. The cap cost is negotiable and can be reduced by a cash down payment, trade-in or a manufacturer's rebate; it can be increased by the loan acquisition fee or costs left over from a previous lease.
- Closed-end Lease — Definition,
- The most common type of car lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.
- Early Termination Charge — Definition,
- Charges that the leasee must pay if the car is turned in early before the term of the lease is over.
- Excess Wear Charge — Definition,
- Most leases set limits for wear and tear on the car during the lease term. The lessee must pay charges for exceeding the limits when turning in the car at the end of the lease.
- Lease (lse) — Abbreviation,
- A written agreement in which the property owner allows a tenant to use property in exchange for rent, and for a specified period. Or, a written agreement in which a car dealer allows a consumer to use a vehicle in exchange for payments for a specified period.
- Preparation Charges — Definition,
- An additional charge that dealers try to impose on buyers. It represents pure profit for the dealers, who have already been paid by the manufacturer for the cost of preparing the car for sale.
- Trade-in Value — Definition,
- The amount that the dealership will credit you for the vehicle you provide as partial or full payment for another vehicle. Amount credited is frequently about 5 percent below the wholesale value of the vehicle.
- Walk-away Lease — Definition,
- The most common type of car lease, also known as a closed-end lease. The lessee may return the car at the end of the lease term, pay any end-of-lease costs, such as the disposition fee, and the lease agreement is over. In a closed-end lease, the lender assumes the risk of predicting the value of the vehicle (its residual value) at the end of the lease's term. Closed-end lease payments are somewhat higher than open-end lease payments.
