If you frequently lease vehicles, extending might save you thousands in fees. Your lease may not have an option to renew the contract, but you can usually negotiate one anyway. Ultimately, the value of the car at the end of the lease will probably be the deciding factor for whether or not you should renew the contract.
Identification
You can extend an auto lease if your contract contains a clause allowing you to renew. When your lease agreement does not have an option to renew, you might be able to negotiate for a renewal by asking the car dealer for one. However, unless your contract specifically gives you the option, a renewal is no guarantee.
Benefits
In generally, extending an auto lease costs less than buying a new lease, because the dealer will not charge initial fees, such as a down payment on the car or a security deposit. The lease might also charge a lower monthly premium, because the car has depreciated in value --- lease agreements only make you pay for the depreciation in the value of the car plus an administrative fee.
Should You Extend?
If you are concerned about making the best financial decision, determine the value of the car. It is usually cheaper to purchase the vehicle at the end of the lease --- most lease options give the consumer the option to buy the vehicle outright after leasing it --- when the value exceeds the cost of the lease. Dealerships have to estimate the value of a car to set the price on a lease. If the dealer underestimated the depreciation, you can make a profit by buying the car and reselling it.
Tips
Get a quote on a vehicle lease extension from your current provider and a quote for a similar vehicle make and model from another dealer. Most areas have several leasing agents for any particular car make and model. If you are leaning towards extending your lease, factor in your maintenance during the original agreement. You may, for example, not have changed the oil or performed other routine work, which could make the car unreliable in the future.
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