Traditionally, lessees have to decide between either a) turning their lease vehicle in and leasing or buying a new vehicle; or b) extending their existing lease for a fixed term or on a month-to-month basis.
Edmunds’ experts contacted a number of the top automakers’ finance arms to see what options they’re providing to help people whose leases are ending soon. Here’s what they learned and what you need to know about closing out your lease in the coming months.
CHECK IN WITH YOUR LEASING COMPANY
The best place to start is to search for your automaker’s finance website and enter “COVID-19” to bring up the relevant page with the latest information. However, in many cases, companies such as Audi, BMW, Chrysler, Ford, Lexus and Toyota want lease customers to contact them directly by phone to discuss their options.
Calling will likely take longer than usual because many customers have similar concerns, plus the companies are likely running lower-staffed call centers as part of physical distancing recommendations. Keep this in mind and be patient with call center employees who are trying to help.
NEXT STEPS IF YOU CHOOSE TO TURN IN YOUR LEASE
If dealerships are open in your area and you feel comfortable doing so, you can turn in your lease vehicle there as usual. Just be sure to wear a mask and follow physical distancing guidelines. But if you’d rather not go out, or the dealerships are closed in your area, ask your leasing company or the dealership if it offers home pickups of lease vehicles. If a pickup isn’t an option, you may have to opt for a lease extension.
Some companies, such as Mazda, are explicitly offering home pickup with the caveat that you’ll be billed later for any costs assessed in the post-lease inspection process. These inspections would normally be done before you turn in a vehicle. If you’ve driven your vehicle past its allotted miles or gotten some dents or dings, know that you’ll be billed for it at some point. If you plan on leasing from the same automaker again, we suggest asking to have these fees reduced or waived as part of your negotiation on the new car.
LEASE EXTENSIONS
Opting for a lease extension means you will continue with your monthly payment for an agreed-upon timeframe. Make sure to check how much additional mileage you are allowed during the extra months. In many cases, you’ll be given a prorated amount. For example, if your contract has a 12,000-mile limit per year, you would be given an extra 1,000 miles for each month the lease is extended. Most people aren’t driving much these days, so the chances of you going over the allotment are significantly reduced.
A number of auto lease companies such as Chase Auto (which services Aston Martin, Jaguar, Land Rover, Mazda and Subaru), General Motors and Nissan will automatically extend customers’ leases if they haven’t heard from them by the end of their lease. Extension periods can range from one month for General Motors to up to six months for Chase Auto.
You’ll need to ensure your lessor offers this service and make the necessary arrangements, including making payments on time. Checking your mailbox for a formal letter or head to your finance company’s COVID-19 web page for more information.
Lease extensions are also possible with brands that are offering “customized solutions,” but you’ll have to check with your automaker to determine how much time you’ll be given.
Be aware that if you choose to extend your lease, you’ll likely have to pay for another year of vehicle registration even if the extension is only for a month. This shouldn’t make it a deal-breaker, but make sure to factor that cost into your calculations and check with your state Department of Motor Vehicles on exact fees.
Finally, if you had plans to buy your vehicle at the end of the lease but still want to take advantage of a lease extension, know that the buyout price will often be reduced and reassessed when the time comes.
The safest thing for you at this time is to get a lease extension and wait things out a while, but be sure to read the fine print and know the other costs that you might be responsible for.
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