Mileage contract: Everything you need to know (Credit glossary)


The mileage contract in leasing is a more secure form of contract for the customer. This is because by specifying the mileage at the beginning of the contract and billing at the end of the contract on the basis of the actual kilometers driven, the Customer from unexpected costs protected. In addition, with a mileage contract, the customer is freed from the risk of the used car market, as the mileage is fixed in advance. Thus, with a mileage contract, the customer knows exactly in advance the costs incurred for car leasing, which makes planning and control much easier.

Definition of the kilometer contract

The mileage contract is a type of lease in which the lessee agrees to drive a certain number of miles per year for a fixed term. The lessee pays a monthly fee based on the number of kilometers driven. At the end of the term, the lessee is charged additionally for each kilometer exceeded.

The procedure for the kilometer contract

The process of a kilometer contract in leasing is relatively simple. First, the customer must agree a certain number of kilometers per year with the lessor. This number is then included in the contract. If the customer exceeds the agreed number of kilometers, he must pay an additional fee. If the customer does not reach the agreed number of kilometers, he often receives a credit for reduced kilometers. The kilometer contract ends when the agreed term has been reached.

Alternatives to the kilometer contract

Alternatives to mileage leasing are Residual value leasing, finance leasing and full-service leasing, where you can see the Car via a subscription model can book conveniently.

Kilometer contract advantages and disadvantages

Residual value leasing

An alternative to mileage leasing is Residual value leasing. At the end of the lease term, the lessee has the option to sell the asset at a residual value price agreed in advance to take over.

Although this residual value price is fixed at the beginning of the lease, the lessor can subsequently adjust the buy-back price. If the actual value of the car at the end of the leasing period differs from the calculated residual value, the lessee bears the difference. In addition, leasing providers reserve the right to take developments on the used car market into account when recalculating the residual value. For example, when diesel vehicles dropped sharply in value due to political discussions, people with residual value leases had to pay this price discount out of their own pockets.

In summary, residual value leasing is usually cheaper than mileage leasing because the lessor takes a lower risk. However, the disadvantage of residual value leasing is that you cannot predict exactly how much you will have to pay at the end of the contract. This is because the cost depends on the future residual value of the car, which cannot be predicted exactly.

Finance lease

The finance lease is an installment plan of the car. The leasing installments are used to pay off the purchase price of the car. However, the car remains the property of the lessor until it is paid off in full. This gives the lessor a good security and some car dealerships have decided to use it. Finance lease contracts also despite negative Schufa.

The finance lease does not include any additional service components. This means that only the vehicle itself is leased. Finance leases can be structured as residual value or mileage leases.

In the case of finance leasing, you can fully or partially finance the car through the leasing contract. In case of full amortization of the car, it belongs to you afterwards. However, if you only partially amortize the car via the leasing contract, you must subsequently pay off the residual value of the car. Alternatively, you can return the car free of charge and lease a new one.

Full-service leasing

With full-service leasing, the lessee can choose from a range of service components such as:

  • Tank Management,
  • Repair and maintenance,
  • Breakdown and replacement car service or
  • Driver's license check

choose. You can combine these service packages in modules. The more service components you add, the higher the monthly lease payment.

Full-service leasing saves you the work of maintaining and servicing the vehicle, as these costs are already integrated into the monthly leasing rate. Full-service leasing therefore gives you the best cost control. However, this additional service also comes with additional costs.

When should you choose a mileage contract when leasing?

A mileage contract when leasing can be a good option if you need a vehicle for a certain period of time and can easily estimate the number of miles per year. In addition, a mileage lease offers better security than a residual value lease, since the lessor cannot pass on a drop in the price of the car to the lessee. Anyone who is willing to pay a small premium for this security should opt for mileage leasing.

How useful was this post?

Click on a star to rate it!

Average rating 5 / 5. Vote count: 1

No votes so far! Be the first to rate this post.

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Leave a Comment