Under a standard Honda lease agreement, the consumer agrees to make a monthly payment in exchange for the privilege of driving the car a certain number of miles. The amount of the monthly payment is a function of a number of variables, including the length of the lease term, the number of miles allowed to be driven by the consumer, and whether up-front money is paid. At the inception of the lease, the consumer chooses the number of permissible miles under the terms of the lease, usually 10,000, 12,000 or 15,000 miles per year.
There is a significant economic incentive for a consumer to pre-purchase more miles than he or she might ultimately drive, because if the actual mileage exceeds the pre-purchased amount at the end of the lease, the consumer is charged a substantial “excessive mileage” penalty ranging from $0.15 to $0.25 per mile for each mile over the mileage provided in the lease.
But what happens when the consumer drives less than the contracted number of miles? Surely Honda provides a refund for the value of these unused miles, or a credit against other end of lease charges, right? Wrong.
While some automobile manufacturers use the value of unused miles as a credit or incentive to entice a consumer to enter into a new lease agreement, Honda provides no refund (or credit against other charges) for these unused miles at the end of the lease term. As a result, the consumer pays Honda for miles he or she has not used. In addition, Honda receives an additional windfall by reclaiming a car with less wear and tear, and a residual value greater than originally anticipated at the time the lease was entered into.
If you or someone you know has returned a leased vehicle to Honda at the end of a lease term with unused miles, please contact us to discuss your legal rights.