Can You Extend a Car Lease?

You can extend a car lease to push your lease end date out a month or more. Many lease extensions run from a single month to around six months, with some extending out for less than a year. You can request a lease extension at any point in your lease term. 

In addition to asking what documents you need to lease a car, you can ask about lease extensions when you sign your lease agreement initially. Such a proactive approach can set you up for success and minimize the stress of ending a lease. Leasing companies may also notify you of the option to extend your lease within three months of the current lease end date, but you can also initiate a lease extension yourself.

Lease extensions are separate from lease renewals. In a lease renewal, you sign an agreement with new terms. Lease extensions, on the other hand, may not require renegotiation. However, lease renewals and extensions are subject to availability based on the dealership or leasing company you work with. 

Most lease extensions include the same monthly lease payment for the extended period. While some leasing companies charge fees to extend the lease, many are administrative fees. It can be convenient to extend your lease, but lease extensions are short-term solutions. 

Lease extension options

Some dealerships and leasing companies require a formal lease extension request and agreement, while others take a more informal approach: 

• Informal: An example of an informal lease is extending your lease date by 10 days. Most lessors are happy to grant this short of an extension, especially if you let them know well beforehand. You may not need to sign paperwork expressing your lease date’s extension. 
• Formal: In a formal extension, your lessor may require you to sign a statement agreeing to the extended terms. These new terms may include a higher monthly payment or stay the same.

Here are a few examples of lease extensions from Tesla and GM:

• Tesla: Tesla’s lease end options include applying for a lease extension of up to six months. Note that Tesla only allows lease extensions once. You can also extend your lease but return the car early to avoid paying for the additional months. 
• GM: You're only granted a month when you extend your lease with GM. In addition, you don’t get any extra miles on your lease to account for the extension, so keep this in mind if you want to avoid excess mileage fees by extending your lease.

As you can see, each leasing company has its own rules and regulations surrounding lease extensions. If you’re unsure what lease extension options are available, speak with your lessor.  

Why your lease extension request may be denied

Your lease extension request may be rejected for several reasons: 

• You’ve fallen behind on your monthly lease payments
• The car has been recalled for commercial reasons
• Previous agreements may still be in effect
• You didn’t complete the lease extension application correctly

Some leasing companies may allow you to appeal the decision to deny a lease extension. However, you should return your lease on the agreed-upon day. 

Extending even the best car leasing deals may be a poor choice in the long run. However, each lease agreement is unique and requires careful consideration. Here are a few ways to know if it’s an excellent time to extend your car lease: 

• You like the car you’re driving and want more time to decide if you can afford the monthly finance payments 
• You’re not ready to transition to the next step, be it another lease, financing a car, walking away, or buying a car outright
• You want time to shop around for the best deal 
• You want to continue to build your credit 
• You want to continue to build leased car equity  
• You need time to gather funds for a down payment on a lease or loan 
• You need time to address excess wear and tear, maintenance, or other concerns that may result in penalty fines

Most new cars come with a three-year, 36,000-mile warranty you’re likely covered by with your lease. However, you should know when that warranty coverage ends and when your lease expires. If your lease ends after the warranty is up, you could be liable for costly repairs. 

Lease extensions can be a double-edged sword. Here are a few pros and cons to consider if you want to extend your lease. 

Pros of extending a lease

• Gives you time to plan out your next move
• Requires less effort than finding an alternative
• Allows you to keep your car for an extended period
• Awards you the flexibility of time to make a more informed decision
• Can be less expensive than immediately financing a car loan 
• Lease extensions typically don’t come with (steep) fees
• May extend you out long enough to take advantage of upcoming lease incentives
• Helps you save up even more for a down payment
• Buys you time to address lease violations, if any

Cons of extending a lease

• Terms are much shorter than the average lease 
• Typically doesn’t decrease the residual value listed in the original lease agreement
• Can incur extension fees
• You may pay more for the car if you choose a lease buyout
• Lessors may not grant you additional mileage 
• Your car’s manufacturer warranty may expire before your lease ends 
• Can be less secure than a formal lease agreement

Extending your car lease doesn’t necessarily change the residual value in your favor. Instead, most lease extensions roll forward with the same residual value in your original lease agreement. Such an arrangement can make finding the best time to lease a car even more critical to your bottom line. 

Remember that the leasing company determines the residual value at the beginning of your lease. The residual value is also the price you’ll pay if you want to (and the leasing company allows you to) buy the car once the lease ends. If you extend your lease for a month, this shouldn’t significantly impact what you pay for the car, but any longer than that could have you paying more for a car that’s now worth less. 

If you plan on buying out your lease, consider your options carefully before you look into lease extensions. The monthly payments you make over your original agreement may cost you more than buying or financing the car on your original lease termination date. It can be worthwhile to calculate the difference to see what impact a lease extension can make. 

Choosing between extending your car lease or ending your lease agreement can present a challenge. However, it depends on your situation, from the leasing extension terms offered to you to your financial situation. Car lease extensions are short, which can help float you along until your circumstances are more favorable. However, waiting too long can put you at an increased risk of financial loss. 

If all this talk of lease extensions has you clutching your head, don’t fret. FINN offers a convenient solution that allows you to pick and choose which models you drive. Select your favorite among the FINN fleet, and you can have it delivered straight to your door. Your monthly payment covers most of your costs. What’s not to love about a FINN car subscription?