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Leases (PCP) mileage limits and their purpose

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rdfcpete:
Just a point of discussion I recently came across via the Mrs' PCP on her previous Megane, mileage limits being something that I guess only ever comes up as a 'query' or issue at end of term.

I've never had a PCP or lease myself, ever, so it was an interesting one for me.

She'd had the Renault for coming up for 3 years and looked at the huge, ever growing market for other lease options. She'd set her heart on an A1 or Polo. Nearest Volkswagen dealer got her in, test drive etc, threw as many comforts her way as they could.

The intriguing bit for me was that the VW salesman stated several times that despite the fact she was way, way over her mileage limit on the Renault contract, that VW would settle the extra mileage fees - bearing in mind the Megane was 8k a year, so 24k across term - she was handing the car over with 52k miles on the clock. Way over, probably over £1200+ in extra mileage fees. The VW salesman assured her she wouldn't need to pay any of it and the contract would be 'settled' by them & that she just had to put down a mandatory deposit (£500 in this case).

This was pretty much the theme from every offer from all manufacturer approved dealers, they were overly enthusiastic to 'clear' & settle the Renault contract to get the business on their car from her. Naturally, perhaps.

This drew the question in my mind, if you're looking at leasing/doing a pcp again on another new car at the end of term (and avoid the balloon payment by giving the current car back), what's the point of the mileage limit given that even if you go for a lower mileage threshold and pay less per month as well as on the overall contract and get a better deal, then exceed the overall contract mileage limit, in reality it seems the over spill fees don't apply or come out of the drivers pocket?

E.G. If you had say a brand new MK7 Golf GTI with the below offers on the table;


* 6000   miles/3 years @ £259 a month
* 14000 miles/3 years @ £349 a month
- and you eventually hand the car in with 60000 miles after 3 years with the intention of getting another brand new car on a pcp/lease (from VW or otherwise), why would you go for the more expensive option when the new lease contract vendor (VW or not) will pick up the slack on the mileage T&Cs?  :confused: :ashamed:

Thanks.

omeydz:
Hmm interesting

Frodo-anni:
Will the excess mileage charge not end up built into the finance figures for the other car?

rdfcpete:

--- Quote from: Frodo-anni on May 13, 2017, 10:16:00 pm ---Will the excess mileage charge not end up built into the finance figures for the other car?

--- End quote ---

.... no? Not considering in this instance, she changed contract provider (cross lease company and cross manufacturer, too) and the original lease was 100% settled with around 2 months remaining.

I think the dealers are in general that desperate to get your business that they'll do this in a lot of situations, judging by her experience. Which is what led to me to ask, what purpose does the original mileage limit actually serve if it's paid off by the new lease provider so willingly?

doylebros:
This is just as you've stated, a proactive move to get what business is out there, cause those storage areas are full and that production line is far too expensive to stop.

Plus, those newly introduced road tax charges on new vehicles hasn't help their trade, and the governments pending ruling on city emission charges on vehicles.

There was a good article in the FT (March 24, 2017 5:56 am by Jonathan Eley
Are the wheels about to fall off car finance?) dig it out worth a read if your interested.

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