Car Leasing Myth Busters #8: Extending a Lease
When you take out a new car lease, you enter into an agreement for a set period of time. This ranges from 24 months up to 60 months. There are multitude of reasons why you might want to extend the lease. It might be that you absolutely love the car and want to keep it a bit longer, or it might be that there isn't a deal out there at the moment on a new car that takes your fancy. Whatever your reason, extending your car lease is an option that is available to you.
Looking in-depth at car leasing extension, there are a few different options and methods. What one is best for you will depend on your circumstances and overall goal when extending. Don't worry, the team at Pendle Lease can discuss your lease with you and explain the details of each one. Whilst we can't advise you on what one to choose, we can give you all the information you need to make a fully informed decision for yourself. Let's take a look at those options.
Extending Your Car Lease Mid-Way Through Your Contract
Example: you have taken out a car lease for 36 months anticipating that you will want a new one in 3 years time. Circumstances in life can change in many ways and now you think that 48 months is better suited to your needs, but you are mid-way through your contract.
This query is actually very common. In short, it is entirely possible to increase the length of your contract mid-way through.
How To Do It?
Firstly, if your lease is with us, give the Pendle Team a call (or whoever your broker is). You can speak to the finance funder directly, but you might find it easier to let us do the leg work for you. There are a few stipulations here. They vary slightly between each finance funder, but broadly speaking they are the same. It is important to note that is not possible to shorten the duration of your lease using this option, or any of the subsequent options we are discussing. The only option available to you for ending your car lease early is called an Early Termination, and that will be discussed in our next Car Leasing Myth Busters.
You must:
- if applicable, be at least 6 months into your contract
- have a minimum of 6 months remaining on the contract; you cannot extend using this method with only 2 months remaining, for example
- provide a current mileage reading; whether your are on track for your mileage allowance will be calculated
- a new monthly price will be calculated for you
- if you wish to proceed, sign the document and new contract. This may be online
Informally Extending Your Car Lease
Example: you have come to the end of your car lease but you just want to keep it for a little bit longer. You don't want the long term commitment of signing another contract.
Again, this is another very common query and something a fair amount of leasing customers opt for. It is called an informal extension as it does not require you signing another contract or committing to a set period of time. An informal extension gives you the freedom to decide when your car lease goes back once you have passed the contract end date. Always speak to us at Pendle Lease for all the information before hand, but is a very straight forward process.
How To Do It?
- Speak to the Pendle Team is always the first step
- In short, there is nothing for you to do
- There is no need for us to notify the finance funder or sign any new contract; they will not collect the car unless it is booked in for collection by us
- Your contract will continue, usually with the same monthly payments as you have been paying throughout
- Your permitted mileage will be increased; it will be calculated once the car goes back. Example: you have a contract permitting 10,000 miles per year. This gives you approximately 830 miles per month. If you keep the car on an informal extension for another 3 months, so you will be permitted an additional 2,500 miles (approx)
- Invoicing/monthly payments are done in arrears. This means a payment will come out the month after the car goes back
- There is no minimum period and you can give notice to return the car at any point
- There is no formal time limit on the period you can keep it for using this option, but the leasing funder reserves the right to ask for the vehicle back at any time. In addition, if you are considering keeping in for a significant period of time, then you may want to consider a Formal Extension
Formally Extending Your Car Lease
Example: you have reached the end of your lease agreement and know that you want to keep it for a set period of time.
This is a frequent question for both business and personal lease customers. Unlike an informal extension, this option requires you committing to a fixed period of time. You will be signing a new contract to reflect the extension and it is likely that your monthly payments will change. How it changes varies between each finance funder; there have been occasions where the monthly payments have gone down, but also times where they have gone up. You will be provided with a new contract quotation before you commit, so you can decide if you want to proceed with this option or not.
How To Do It?
- Speak to Pendle Team
- Provide a current mileage reading, along with how long you would like to formally extend for
- There is typically only two lengths of time available for a formal extension: 6 months or 12 months
- Receive a quotation and read through it thoroughly
- If you decide to proceed, sign the new contract
- You are committed to this time period once signed. If you wish to hand the car back early, you will be subjected to an Early Termination fee
The Best Option?
So, there you have it. Those are the three options available to you if wish to extend your car lease. It is entirely possible to do, but what options is best for you will be entirely your choice. Pendle Lease can only provide you with the information needed to make a decision, we cannot advise or make the decision for you. Hopefully it provides some reassurance and dispels the old myth that there are no other options available to you at the end of a car lease, other than simply giving it back.
For more information, give our expert team a call today on 01277 549500 or email sales@pendlelease.co.uk
