How Can I Extend a Car Lease? Should I?

Read time: 6 minutes 

If you're nearing the end of your car lease, you might be wondering: can you extend a car lease?

The short answer is yes. 

But should you? That answer demands a more nuanced conversation. 

While it can be tempting to keep your current ride on lease for a bit longer, there are several factors to consider before making this decision. 

Whether you've grown attached to your current vehicle, you're in financial limbo, or you need more time to think through your options, we'll walk you through the pros and cons of car lease extensions and all of the factors you need to consider. 

Table of Contents:

What Are My Lease Extension Options? 
Pros and Cons of Extending a Car Lease
How Do I Extend a Car Lease? 
Other End-of-Lease Options
How Lease End Can Help 

What Are My Lease Extension Options?

There are typically two options for extending a car lease: an informal extension and a formal one.

Informal lease extension

An informal extension allows you to keep your leased car for just a bit longer than you originally arranged, continuing your initial lease agreement terms. Essentially, you’d be under the same lease contract and would continue making monthly payments just like you have been.  

As far as how long you can extend an informal lease, you're looking at no more than six extra months. 

This is a great quick-fix option if you can still afford your monthly payments and don’t anticipate you’ll rack up additional wear-and-tear or mileage-overage fees (more on that later).

Formal lease extension 

A formal lease extension usually requires a new contract. This means your monthly payments would likely change, you’d have a new mileage allowance, etc.

Time-wise, a formal lease extension is more of a 6-12 month solution — and while it could end up being the best choice in your particular situation, it’s generally not the best option for the majority of drivers.

Pros and Cons of Extending a Car Lease 

So, a lease extension seems pretty straightforward, right? We all know, though, that there’s no such thing as a free lunch — especially in the dealership world. 

While an extension can buy you some much-needed time in the short-term, it could come back to bite you in the long run. Luckily, we’ve got the good news and the bad news on lease extensions right here.

Pros of extending a lease

Cons of extending a lease

How Do I Extend a Car Lease?  

1. Contact your lessor: Reach out to your leasing company before your lease expires to get all of the detailed specifics on their extension process. (You should be able to find their contact information on your lease agreement or their website.) They will provide you with details on the extension process, including any paperwork that needs to be completed.

2. Review the terms: Be sure to carefully review the terms of the lease extension, including the new lease duration, monthly payments, and any additional fees or charges that may apply.

3. Sign the agreement: If you decide to proceed with the lease extension, sign the lease extension agreement. Make sure you understand all terms and conditions before signing. Then, submit any required documentation, such as a signed lease extension agreement, to your lessor to finalize the extension.

4. Continue your lease: Once your extension is approved and processed, continue to make your monthly lease payments as outlined in the agreement until the new lease end date. At that point, you'll have to make a decision again. 

Other End-of-Lease Options

Turn in your vehicle and apply it toward another lease or purchase. 

If you’re really itching to get back into a new lease, you can leverage your current lease turn-in to get a good deal on your next one instead of extending. 

Dealerships often offer incentives to customers who turn their car back in and immediately enter another lease, potentially with upgraded features. 

Better yet, consider buying a used car from your dealer or another seller. Buying a used car can be more cost-effective than extending your lease, especially if you find a reliable vehicle with low mileage.

Buy out your lease and keep your car. 

If you’re considering an extension because you like the vehicle you have now, buying out and keeping your leased car can be a great option. 

Why? 

• Familiarity and comfort: You've grown accustomed to your car and love driving it.
• No surprises: You know your car's history and maintenance record, reducing the risk of unexpected issues.
• Cash in on value: Depending on your car’s residual value, you could get a great deal on the car compared to its market value.
• Ownership and equity: Plus, buying your leased car means you own it outright, giving you the freedom to keep it as long as you like...and if you change your mind down the road, you can sell the car and potentially recoup some of your investment. 

To learn more about this option, read about how a lease buyout works.  (or if you're a visual learner, watch our video: How Does a Car Lease Buyout Work?) 

Buy out your lease and sell your car. 

If you’re not interested in keeping the car, but you do have equity in the vehicle, you can buy out your car to turn around and sell it. 

If your buyout amount is lower than the car’s current value, you'll make money off of your car lease.

How Lease End Can Help

You’ve got options. 

Deciding which one is best is the hard part. 

Luckily, you’ve got Lease End to help you out. We want to help you think through your lease-end options and find the one that’s right for you. If you decide to buy out your car, we can take care of the stressful parts so ending your lease is as easy as extending it. 

We’ll arrange a car loan that fits your monthly budget through our trusted partners like Ally Bank, TD Bank and Capital One.

We can even hook you up with customizable, extended coverage so you’re not left hanging after your lease ends.  

If you'd prefer to start the buyout process online, enter your license plate or VIN number below: