If your lease is ending and you are not ready to decide what is next, you may be able to keep the car a little longer. Many lenders allow lease extensions, though the terms vary and you need to ask before the lease runs out.
This is one of your car lease end options.
The two kinds of extension
Month to month. The most common. You keep paying the same monthly amount and keep the car one month at a time. Many lenders allow this for up to around six months, sometimes less. You can usually return the car at the end of any month.
A fixed term extension. Less common. The lender agrees a new end date, sometimes 6 or 12 months further out, occasionally with a recalculated payment.
Both are at the lender's discretion. Some offer extensions readily, some only in particular circumstances, and some not at all.
Why people extend
- The next car is not ready. A factory order or a delivery date that has slipped.
- More time to decide. Whether to buy out the lease, return it or lease again.
- Waiting for a better deal. New incentives, a new model year, or the end of a quarter. See the best time to lease a car.
- A life change. A move or a job change that makes the timing of a new commitment awkward.
What it costs
Usually the same monthly payment you pay now. That is often good value, because by the end of a lease the car has lost most of the value it will lose, and you are paying a payment calculated on the steeper early depreciation.
But watch these:
Mileage. Your allowance is usually extended pro rata. If you are allowed 12,000 miles a year, a three month extension typically adds 3,000 miles. If you are already over, the excess keeps building. See car lease mileage limits.
Insurance and registration still need to be kept current.
Wear and tear. You will still be judged on the car's condition when you return it. See excess wear and tear.
How to ask
- Call your lender, not the dealer, around 60 to 90 days before the lease ends.
- Ask which extensions they offer and for how long.
- Get the terms in writing, including the payment, the new end date or monthly arrangement, and the mileage allowance.
- Confirm it is in place before the end date. If the lease simply runs out, you may be charged differently or asked to return the car.
When an extension is not the best move
If your car is worth more than its buyout price. You may have equity you could use now, and waiting risks it shrinking. See equity in a leased car.
If the manufacturer is offering a pull ahead. Some brands will waive your remaining payments if you lease a new car from them early, which is the opposite of extending. See lease pull ahead programs.
If you are well over your miles. Extending adds to a bill you already face. Buying the car out removes it.
The short version
Many lenders allow lease extensions, usually month to month for up to about six months at the same payment. Ask your lender two to three months before the end, get the terms in writing, and check whether equity or a pull ahead offer makes a different move better.
If you want help working out which lease end option costs least in your situation, get in touch.
