One of the most frequent questions our clients ask is whether it's possible to extend a car lease. The answer is YES! But wait - there's more to car leasing than just getting the go-ahead.
What are the available car lease extensions? Who qualifies for a lease extension? What does it involve to get an extension?
This post answers the questions above, plus every other detail surrounding car leasing. So let's begin.
Types of Car Lease Extensions
In essence, a lease extension is universal; you can enter the contract either formally or informally.
Formal Extension
Here, the customer signs a legally-binding modified agreement to extend the lease for more than six months, i.e., 6-12 months. The extension period starts immediately after the elapse of the previous contract.
The formal extension includes a revised mileage agreement and monthly rental fees charged based on the expected vehicle depreciation during the extension.
Informal Extension
If you keep using a car after the lease period elapses, you shall have extended the contract informally. The informal extension continues until the leasing company requests for collection. Nonetheless, you must inform the lease company so they grant you permission for an informal extension.
You'll also keep paying the monthly rental arrears as stipulated in the original lease contract. An informal extension is usually temporary and enhances a seamless transition between lease agreements. If the period exceeds six months, the lease provider will have the right to request a recall.
What are the Requirements for a Lease Extension?
Here's a step-by-step layout of what it takes to get an extension on your lease:
- Reach out to your Financial House to request the lease extension.
- The House will review your request to determine if you're eligible for the extension and alert you accordingly.
- Upon approval of your request, the Finance House will send you a new modifying contract. On top of that, you'll get the terms and conditions such as the contract end date and mileage allowance, if any. Here's a tip: Allows counter-check to confirm every document before signing and returning to the leasing provider.
- Print and sign the new modifying agreement and send it back to the address listed by your leasing company.
- Upon receipt, the leasing company will forward the documents to the Financial House for review (this takes up to 5 business days).
- Keep paying the monthly rentals until the completion of the contract extension and issuance of a new end date.
Who's Exempted from a Lease Extension?
Regrettably, not everyone can get a lease extension. You may not become eligible if:
- Your current account has arrears, faces the risk of default or insolvency.
- The initial modifying agreement is still binding.
- You haven't filled out the modifying agreement exhaustively.
- The leasing company decides to recall the vehicle for commercial reasons.
- There's a request to add or remove a relief vehicle.
Did you know that you can also get out of a car lease if you no longer need it?
How Long Does it Take to Process the Extension?
On average, it takes around four weeks to process all the paperwork and grant a lease extension. In most instances, though, the process may take much quicker, but for the sake of surety, we suggest you wait for up to a month.
Wrap Up
Getting a lease extension is always a thoughtful way of securing continuous transportation means than applying for a new lease, which is quite expensive. However, the lease can be costly if you don't stick to the contract terms like repairs and warranties. So you want to be exceedingly cautious and follow all the unwritten rules of driving.
Are you on the market for service vehicles? Wilmar is one of the best and largest independent vehicle leasing and management company in North Carolina. We leverage our rich 40-year experience and state-of-the-art resources to provide the best services to our clients. Contact us today to secure your lease.
