How to Extend a Car Lease

When you extend a car lease, you are ending your first least and starting fresh. Your car payments will be a lot less for your new lease because the car is used instead of new, but there are some things you should consider before deciding if this option is for you.

Instructions

Difficulty: Moderately Easy

1. Compare the different end of lease options to determine if extending your lease is right for you. If you would like to keep the car you have but can't afford to make car loan payments, this may be a good option.
2. Evaluate your maintenance record for your car. If you have done your due diligence and taken good care of your car, then it makes sense to re-lease your car rather than lease another used car. You know how well you have maintained the car, but you may not know how well another used car was maintained.
3. Talk to your dealer about extending your lease and get a lease estimate. Compare the lease estimate to the payments you would have to pay to lease a similar new car. If you are will have to pay only slightly lower monthly payments for the new model, extending probably isn't worth it.
4. Get a lease quote from a leasing company outside the dealership if you don't like the dealer's terms. You can sometimes save money on lease payments if you secure outside financing.

Tips & Warnings

• Consider buying your car if you want to keep it rather than leasing it again. If you purchase your car off lease you can get it for the residual value. Check the Kelley Blue Book to see if the residual value is less than the market value of the car to see if that would be a good deal for you (see Resources below).
• If you can't afford the monthly payments for your current lease and can't sell the car or transfer the lease, you may be able to extend the term on your current lease to lower the payments. Be careful with this option, however, as the payments might not go down that much and you will be locked into keeping the car even longer.
• It makes more sense to extend a lease for a luxury car than for an economy or mid-priced car because cars depreciate the most in the first few years and leasing terms are based on residual value.
• When you extend your lease you will likely be leasing a car that has outlived its warranty. Most warranties last only as long as the first lease.