What to Do if You Run Out of Free Km on a Car Lease

About a month ago, I wrote an article about What to do if you estimated your Free Km wouldn't be enough. But it was written from a preventive point of view, so multiple clients have asked us about what to do under situations that these were already "burn out." So, what to do if you actually run out of free Kms?

Stop. Stop Right Now And Think

I tend to use examples each time I need to explain something. It is probably the best way to help someone understand a specific idea and how it affects a real-life situation. Just by saying "OK, every extra km is going to cost me something" doesn't mean anything or sounds "tangible" to anyone.

Car Costs

Yes, we agree that every extra mile you make has a price. So you need right now to estimate if it is actually worth to you continue doing so. Just see a straightforward example situation:

You live in Toronto and need to make a weekend trip to Montreal. That is about 600 km in total one way, so 1,200 the roundtrip without including local driving during your stay.

If you were driving a leased vehicle, these would be the primary costs of doing so:

  • Nissan Rogue, an extra Km would cost about 0.08CAD: 1,200 km X 0.08 = 96CAD + fuel costs.
  • Toyota Highlander, an extra Km would cost about 0.12CAD. 1,200 km X 0.08 = 144CAD + fuel costs.
  • Audi Q7, an extra Km would cost about 0.20CAD. 1,200 km X 0.20 = 240CAD + fuel costs.

Fuel Costs

Fuel costs are a little bit high nowadays :) Yes, we all know that, so making the 1,200 km will take you probably around 80 liters each way on those sample vehicles. I know this varies a lot, but let's keep it simple with the purpose of keeping the example as flat as possible.

  • 80 litres x 2 times = 160 x 1,40CAD/liter = 224CAD on fuel costs

It isn't "Just Fuel" Anymore

Yes, I know you are aware of that, but just see, from the previous example, that if you were driving a 0.20CAD/km vehicle, you would be spending, on average, two times more than the "just fuel approach".

Up to this point, if you are traveling alone, I'm sure you can get a plane ticket for less than 460CAD roundtrip to Montreal. If you are going with your family, yes, the car still is the best affordable option, but not as right as a car lease should be. In fact, you feel, on an example like the one before, that you would be like "renting" your car.

Estimate Your Driving Needs Until the End of the Lease

There are multiple reasons and outcomes to this situation that will ultimately depend on the original deal you got and how many km it has on the odometer, but basically, there are some questions I would ask myself after carefully checking all numbers like:

  • Is my daily commute enough to blow my budget?
  • Would it be cheaper to use public transportation and have the car parked?
  • Is there any chance that multiple trips like this may come out?
  • Was my downpayment good enough to have someone interested in buying your car?
  • Do I want to change the vehicle for sure after the lease is over?

If you answer is yes, then I strongly suggest you post it "for transfer" right now. If that is the fact, then you are late, and you should have posted it yesterday.

On the other hand:

  • Can you afford the estimate of returning the vehicle with an X amount of km? (X is your estimate)
  • Are you likely to keep the car after the lease is over?
  • Do you have only a few months left?

If you answer is yes, then it may not be a good idea to continue doing the same. No worries, as you won't be surprised when the contract ends and you know what you expect to pay. Still...

Still, Always Post Your Lease for Transfer

Either way, you have nothing to lose. The best case scenario is that someone says "Hey! I want your car!" either because it will work for them or because they want to keep it after because the residual value seems very attractive to them.

Post Your Lease for Transfer

About the author

Jorge Diaz is a passionate car lover, winter driver & Software Engineer. For the last 10 years, he has built Online Solutions used by more than 5,000 companies across the globe. He founded LeaseCosts in 2016 with the purpose of simplifying and helping Canadians to better understand the complex market of car leasing in Canada. You can connect with him at Leantrepreneurship.com.

Jorge is also the author of Car Leasing Done Right: A Canadian Guide for Understanding & Optimizing Vehicle Leasing Costs, released on Nov. 5th, 2021. It is available at Amazon.ca