Can you extend a car lease?

Thinking about keeping your car a little longer? This guide will help you decide if a car lease extension is the right move, with a clear look at the pros and cons.

Leasing is a neat and tidy way to run a car. You make regular monthly payments, then when the agreement comes to an end the car is taken away and you start again.

The trouble is life isn’t always as neat and tidy as a car lease. What if the lease is about to end, but you need to keep the car for longer?

That’s when it will be useful to know if you can extend a car leasing agreement. In this Carwow guide, we’ll explain when and how you can extend a car lease, and the advantages and disadvantages of doing so.

Can you extend a car lease?

The short answer is yes. The longer answer is a bit more involved.

As soon as you think you would like to extend your lease, contact the leasing company so you can talk through your options. Perhaps there’s been a change in your circumstances, or the car that you have ordered to replace your current vehicle has been delayed. Whatever the reason, the leasing company will be able to discuss any extension with you.

The lease provider isn’t obliged to offer an extension, but there’s a good chance they will be flexible.

What is a car lease extension?

A car lease extension is when a leasing agreement is extended beyond the original term of the agreement.

When you sign up to a lease deal, it will be for a set period. Let’s say that period is three years. If you want to hang on to the car for longer, whether that’s a few more weeks or even another 12 months, then you will need to arrange a lease extension.

There are two types of extension. Which is appropriate largely depends on the length of extension you are asking for.

Informal extension

For shorter extensions of a few weeks up to six months, an informal extension is likely to be your best bet. Rather than filling out reams of extra paperwork, you come to an informal arrangement with the leasing provider and continue to pay for the car each month as before.

Be aware that this type of rolling contract is only intended as a short-term solution and the leasing provider could take the car back if the company decides the informal extension is no longer in its interest.

Formal extension

If you want to keep the car for a longer period (say, a year), then a formal extension will be the way to go. This puts the contract extension in writing. There’s more paperwork to fill out and it’s likely that an admin fee will apply, but a formal agreement puts the extension on a clearer footing.

The contract extension will confirm expectations around the permitted mileage and the monthly payment, which won’t necessarily be the same as before. It could be that the new monthly rental is lower, as you are paying for an older car. Having a new end date in writing means there’s no ambiguity around whether the leasing company can decide to take the car back early.

How to extend a car lease

Extending a car lease need not be complicated. Just follow these steps.

• Check your contract: This should explain whether you’re allowed an extension and under what circumstances. You will almost certainly need to be up to date with your payments. It could be that you will need to be close to the end of the agreement (say, the last 90 days).
• Contact the leasing company: Explain your reasons for requesting the extension, and how long you would like to keep the car.
• Discuss whether an informal or formal extension is appropriate: The leasing provider will guide you as to which is the better choice. The length of the extension will be key, with informal agreements for short-term extensions and formal agreements preferred for longer extensions.
• Confirm the monthly payment and any admin fees: This includes the mileage limit and any penalty payments for going beyond the agreed mileage. With an informal agreement, it’s unlikely that an admin fee will be charged. However, a formal agreement involves a fair amount of paperwork and there will be a cost to this.
• Sign the contract extension: If a formal agreement is the right way forward, you’ll need to complete the paperwork.

Pros and cons of extending a car lease

There’s good and bad to a car lease extension. These are some of the advantages and disadvantages you should consider:

Pros of extending a car lease

• It saves you from being without a car: If your next car has been delayed then a car lease extension could save the day.
• Payments could be cheaper: It could be that the leasing company will agree to lower monthly payments as your car is now a few years old.
• No upfront cost: When you start a lease, there’s usually a large up-front payment to make. This is typically equivalent to several months of rental payments. If you’re extending an existing agreement there’s no hefty initial rental.
• You know the car: With a car that you’ve been running for a few years, you know its history. If you were to buy a cheap secondhand car as a stopgap rather than extending the lease, you wouldn’t be so sure of the car’s past.

Cons of extending a car lease

• Admin fees: If you make a formal agreement with the leasing or contract hire company to extend the agreement, then there’s normally a fee to pay.
• An MOT may be needed: Once any car is three years old, it needs to pass the annual MOT test. So be aware of this extra cost.
• The warranty may have expired: Although the length of cover will vary from manufacturer to manufacturer, a three-year warranty package is typical. If your extension takes the lease beyond three years, then any faults and failures may not be covered anymore. It’s another potential extra cost, unless the car is covered by a maintenance contract.
• Be aware of wear and tear: The longer you keep the car, the more likely it is that consumables such as tyres and windscreen wipers may need to be replaced.

Extending a car lease FAQs

Can you extend a car lease for 3 months?

Usually, yes, a three-month lease extension will be possible. It will depend on the leasing company’s policy around contract extensions and whether you have kept up with your monthly payments. Check the terms of your contract and give the leasing company a call to discuss your options.

How long can you extend a car lease for?

This will vary from leasing company to leasing company, although as a rule of thumb extensions of up to 12 months should be possible. It would be unusual to agree to an extension that’s longer than one year.

How many times can you extend a car lease?

This will depend on the leasing company and the circumstances. It may be possible to extend a lease more than once, but don’t bank on being allowed to do so indefinitely.

Car change? Carwow!

Looking for a new set of wheels? With Carwow you can sell your car quickly and for a fair price – as well as find great offers on your next one. Whether you’re looking to buy a car brand new, are after something used or you want to explore car leasing options, Carwow is your one stop shop for new car deals.

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