Car lease extensions could mean holding on to your keys for a few more months

Sarah Fretwell, who lives in Santa Barbara, Calif., knew the lease on her 2017 Audi A3 e-Tron was ending in June, so she contacted the dealer to ask about her options. The dealer suggested she speak directly with Audi’s financing company.

After about an hour on hold, Fretwell was connected to a customer service representative, who arranged for a six-month lease extension in about 5 minutes. “Once I got through, it was an easy experience," Fretwell says.

If you have a vehicle lease nearing the end of its term, it’s increasingly likely that you can get an extension. The novel coronavirus, which causes COVID-19, has people like Fretwell concerned about leaving home and spending time in public places. So turning in a leased vehicle—or picking out a new one—might not be something you want to do right now.

Want an Extension, Just Ask

Several automakers and leasing companies contacted by Consumer Reports said it’s important for the companies to make it easy for customers to stay in their cars, if that’s what they want or need. For starters, people who lease tend to lease again, company officials told us. And repeat customers—always important to a car company—will be especially crucial as automakers enter damage control mode amid the economic downturn.

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Also, with many dealerships and auto auctions around the country closed for business—or operating with skeleton crews—there may not be many physical places for consumers to turn in off-lease cars. Even so, there are options for lease customers who still want to return a vehicle at the end of its lease term.

Customers having difficulty making payments on a lease or auto loan are also being presented with an array of short-term solutions from financing companies. Again, approach varies by manufacturer, but many are offering payment deferrals and other ways for consumers who have fallen upon financial difficulty to make it through these tough times.

Most automakers are working with their leasing companies to make sure that customers who wish to return leased vehicles as scheduled can do so without a lot of hassle, with many offering online transactions and home pickup and delivery. Again, it comes down to each leasing company’s policy, as well as the nuances of each individual deal, says Eric Lyman, senior vice president of ALG, TrueCar’s analytics arm.

Communicate

“Make sure to communicate with your lender and dealer about any challenges you may have with an existing loan or lease, or an upcoming lease termination,” Lyman says. “Captive lenders and dealers prize customer loyalty and should be willing to make small concessions in exchange for an ongoing business relationship, especially during these uncertain and volatile times.”

Scot Hall, the executive vice president of operations at Swap-a-Lease—a company that arranges for lease transfers between individuals—says that leasing companies have everything to gain from being flexible, especially now.

“Getting those cars back right now doesn't do them any good anyway,” he says. “Dealerships and auto auctions have to pick those cars up for them to be removed from the balance sheet of the leasing company, but there’s no way to do that right now.”

Of course, there’s no one-size-fits-all approach to automotive leasing. Most manufacturers told CR that they were handling lease extensions on a case-by-case basis. Even so, most had an option for customers to extend their leases by a month or more.

Lease extensions are nothing new, even under normal circumstances, Hall says. They often include an upfront fee or a premium on monthly payments, but in light of the current situation, many leasing companies are extending leases free of charge, as well as increasing mileage caps to accommodate the extensions.

Stuart Schorr, vice president of communications for Jaguar Land Rover of North America, says that the pandemic has turned automakers’ normal leasing strategy on its ear.

“In general, the goal of most companies is to contact lease customers and have them get a new car early,” he says. “In this case it's more about supporting those who do have to renew, and making it easy for those who prefer to delay the whole process.”