The most challenging part of leasing a car is not knowing what to do when the end of the lease is approaching. This is where extending a car lease comes in handy. You can extend your lease to give you more time to figure out a way forward.
People opt to extend their car lease so that they can save some cash to purchase a new one. Others do it because they don’t have the funds to purchase one. The sudden spike in prices due to several factors, such as a shortage of semiconductor chips and the COVID-19 pandemic, has made it even more difficult to buy cars.
This is why car lease extensions are a more viable option. However, the main question is, “Can you extend a car lease?” The simple answer is, yes, you can. But first, you will have to look at what options you have, the factors to consider, and the pros and cons of extending your car lease. This article goes into detail about it, so stick around.
What Lease Extension Options Do You Have
Before extending a car lease, you should know which lease extensions you have. The two main forms include:
Formal Lease Extension
In this type of lease extension, the leasing company will need you to enter into a contract that will extend your lease for a certain period of time, normally six to 12 months. Additionally, they may also alter your monthly lease payment and mileage limits.
You cannot extend your lease without formally signing a new contract to replace the old one. The new lease contract will commence as soon as the old one ceases. Formal lease extensions are perfect for people who are not afraid to commit for the long term.
Contact your lease company to do a formal lease extension if you’re ready.
Informal Lease Extension
An informal lease extension is where the leasing company extends your lease temporarily for a maximum of six months. This type of extension does not require you to sign a new agreement.
Additionally, elements of the old contract, such as monthly lease payments and mileage limits, will remain the same. An informal lease extension allows you to continue using the car until the leasing company picks it up.
It also facilitates a smooth transition from one lease contract to another. You can also activate an informal lease extension by contacting the leasing company.
Qualification Criteria for a Car Lease
Lease extension companies take a lot into consideration before they can extend a customer’s lease. For that reason, not everyone can get an extension at their request. Some of the things that might cause your lease extension request to be turned down include:
- If you have arrears in your current account
- If your first contract is still active
- If the leasing company recalls the leased vehicle for business reasons,
- If there is a request for the removal or addition of a relief vehicle
Factors to Consider Before Extending Your Car Lease
Can you extend a car lease? Well, you can. However, you should take these factors into consideration first before making that choice.
The first thing you should check before extending your car lease is the mileage. This is because a lease extension contract will not add any extra mileage to your new agreement. Instead, you will be limited to the mileage set during the initial contract.
It is important to ensure that you have sufficient mileage left before making an extension. If you fail to do so, you might end up incurring hefty costs for every extra mile that you travel past the mileage cap. You can even sign a new lease agreement to avoid all these costs.
User preference plays a huge role in determining whether you should extend your car lease or not. It is normal for you to get used to a car after driving it for a long time to the point that getting a new one feels like a far-fetched option.
If you think the car you leased offers the reliability, comfort, and performance that you need, then the best option would be getting a lease extension. On the other hand, if you want a new experience, you can search for a better option.
Extending a lease for a car that has no warranty or whose warranty has expired can be a costly mistake. This is because you might be forced to pay exorbitant sums for towing or repairs when the car suddenly breaks down.
To avoid all these, confirm that you still have enough time left on your warranty before getting a car lease extension. You can risk getting an extension for a car with no warranty if you’re extending the lease for a short period. However, it is not advisable.
Always check the condition the vehicle is in before extending your car lease. Extending a lease for a vehicle that has not been serviced in a long time will always be expensive. This is because dilapidated cars break down more often and always cost more to repair.
Maintain your vehicle on a regular basis to ensure that it is always in mint condition if you plan on extending your car lease in the future.
Weigh the cost of getting a lease extension against that of signing a new agreement all together. At times, making similar monthly payments and servicing a vehicle during a lease extension period might outweigh the cost of signing up for a new lease agreement.
If that is the case, you should opt for the latter to save money.
How to Extend Your Car Lease
These are the steps you should follow to get a car lease extension:
Step 1: Decide on the Lease Extension Period
Consider how long you want to extend the car lease prior to getting it. Car lease extensions usually last for a maximum of 12 months. However, this period varies from one leasing firm to the next. Pick a period that will be convenient for you.
Step 2: Contact the Leasing Company or Dealership
Contact your leasing company and request a car lease extension. You can either do this formally or informally. Work out all of the specifics, such as the amount of monthly payments and the length of the lease extension.
Step 3: Confirm the Details of the Lease Extension
Finally, double-check the lease contract to ensure that everything is still as you agreed.The monthly payments you remit to the company should not be altered.
Should You Extend Your Car Lease
Some of the upsides and downsides that you should keep in mind before extending a car lease include the following:
- Extending a lease gives you time to think about what car you would like to purchase next. It also allows you to wait for your car shipment to arrive while still driving to work, school, or the hospital.
- A car lease extension will enable you to go about your daily business while you wait for the prices of vehicles to come down a bit.
- Getting a lease extension is very simple. All you need to do is call your leasing company, and you’re good to go. This makes it very convenient.
- A car that has been leased for a long time might require several repairs due to the wear and tear it has experienced. This might end up being an expense on your end.
- If you’re not careful, you might end up paying fees that result from extending your car lease. For example, when you go over the mileage limit.
- The warranty period might end up expiring during the lease extension period, subjecting you to costly maintenance and repair costs.
Can you extend a car lease? Hopefully, this article has given you all the answers you need. Extending a car lease is as simple as calling your dealer or leasing company and asking for an extension. However, there are several factors that a leasing company considers before extending your lease.
Cross-check your lease extension agreement severally to ensure that every detail is accurate. This is to avoid incurring hidden or extra charges. Alternatively, you can explore other options aside from extending your car lease, such as re-leasing the car or purchasing it.
Frequently Asked Questions
Yes. You can get a car lease extension as long as you meet all the prerequisite criteria that the leasing company has. Some of them are, your current account should not have any arrears, and your initial contract should not be active.
There are several things you can do when your lease comes to an end, including getting an extension, buying out the lease, and returning the leased car.
Yes. You can opt to buy your lease instead of going for an extension. This is a suitable option if the car is still in good condition. It is also a great way to avoid penalties that come when you go over the mileage cap.
You can extend your car lease for many reasons. For example, before you buy a new one or while waiting for the one you purchased to be shipped to you.