Extending a car lease: What you need to know
Quick insights
- You may be able to extend your car lease depending on what your leasing company offers and the types of extensions available to you.
- The length of your car lease may impact your monthly payments, so it can be helpful to take your budget into account.
- There are several reasons why you may want to extend your car lease, from unpredictable future circumstances to enjoying your current ride.
Not ready to give up your leased car just yet? There are ways to extend your car lease depending on your specific needs and what your leasing company offers.
Lease extension options
Extending your lease can depend on the leasing company you have, your needs and financial situation. You have a few options when it comes to extending your lease. Let’s explore in more detail below.
Informal lease extension
This is an agreement between you and the leasing company to continue the leasing arrangement beyond the original end date without significant changes to the terms. Generally, this type of lease extension is used for short-term leases. For example, if your lease is expiring but you need the car for an additional two months, you may agree verbally to extend the lease under the existing terms.
Formal lease extension
A formal lease extension involves modifying the existing lease agreement or drafting a new one to extend the duration of the car lease, often with adjustments to terms. This option is for those who are looking to continue leasing for a longer duration of time.
Reasons to extend a car lease
There are several reasons why you may want to extend your car lease, including but not limited to:
- Financial benefits: Depending on your leasing contract, it’s possible that you have the ability to continue making lower monthly payments with an extended lease compared to buying a car. You may also find that leasing your current car vs. a newer car is less expensive.
- Lifestyle flexibility: Thinking of buying your own car or moving to a city where you don’t need one? Extending a car lease can provide flexibility for those who are unsure about their future car needs.
- Satisfaction with the current car: People may choose to extend their car lease because they are happy with their current car and see no need to change.
- Market conditions: Depending on the current market, the cost of buying a car could be especially high, or perhaps there’s low availability of certain models, making extending a car lease an attractive option.
How to extend a car lease
To extend your car lease, consider taking the following steps:
- Contact your leasing company: Start by contacting your leasing company a few months before your lease ends. This gives you time to discuss the possibility of an extension and understand the terms that might be available to you.
- Negotiate terms: If possible, negotiate the terms of the lease extension. This could include the monthly payment amount and the duration of the extension.
- Review the agreement: Once you've agreed on the terms, the leasing company will provide an extended lease agreement. Review this carefully to ensure it matches what you discussed.
How long can you extend a car lease for?
You can typically extend your car lease for as little or as long as your leasing company allows, depending on the type of extension you’re getting. There are a few factors that go into determining how long you can extend your car lease for, including:
- The extension periods your company may offer, from short-term extensions (a few months) to long-term extensions (up to a year or possibly more).
- Personal circumstances and needs of the lessee
- Condition and mileage of the vehicle
Remember, the length of the lease extension can impact your monthly payments. For example, if you're extending the lease for a longer period, the leasing company may recalculate the monthly payments based on factors such as the car's depreciation and the remaining life of the vehicle. It may be worth considering your budget when determining your lease extension so that you can make your monthly payments in a timely manner.
In conclusion
If you’re looking to extend your lease for just a few months it can be helpful to understand how the leasing process works. Remember that the length of your lease can affect your monthly payments, so taking a few minutes to create a budget may help you avoid financial complications down the line.
