Evergreen & Automatic Renewal in Equipment Leases
Miss a narrow notice window and an equipment lease can renew for another full year — for equipment you meant to return.
Last reviewed: May 26, 2026 by the BizLeaseCheck Editorial Team
General information, not legal advice.
Overview
Many equipment leases automatically renew ("evergreen") unless the lessee gives written notice within a specific window before expiration. It is one of the most common and avoidable equipment-finance traps.
A missed notice can mean another 12 months of payments on equipment you intended to return or buy out.
Topics to check
The lease requires written notice of non-renewal (or of intent to exercise the purchase option) a set number of days before the end of the term — often 90 to 180 days. If you miss it, the lease renews automatically for another term, frequently a full year, at the same payment.
Because the window opens and closes well before the term ends, it is easy to miss without a reminder.
Find the exact notice deadline, the required method of notice (often written, sometimes certified mail), the renewal length, and whether renewal is for a year or month-to-month. Some leases stack: renewal also restarts the notice requirement for the next term.
Negotiate, where possible, for month-to-month renewal and a shorter notice window.
Calendar the notice deadline the day you sign — ideally two reminders, well before the window closes. Send notice in the required form and keep proof of delivery. If you have already renewed inadvertently, ask the lessor for an early-termination or buyout figure in writing.
Consumer auto-renewal laws generally do not protect commercial equipment leases, so the contract’s window controls.
Key takeaways
- Evergreen clauses auto-renew the lease unless you give timely written notice.
- Notice windows are often 90–180 days before the end of the term.
- A missed window can mean another full year of payments.
- Calendar the deadline at signing and keep proof of notice.
- Consumer auto-renewal laws generally do not protect commercial leases.
Official resources
Legal-review notes
Guide confidence marker: Medium confidence.
- Applicability of any auto-renewal statute to a commercial lease varies by state.
- Notice requirements and renewal terms depend on the document; confirm with counsel.
Frequently asked questions
What is an evergreen clause in an equipment lease?
A clause that automatically renews the lease for another term unless you give written notice within a set window before expiration — often 90 to 180 days. Miss it and you can owe another full term of payments.
How do I avoid automatic renewal?
Calendar the notice deadline when you sign (with reminders), send notice in the exact form the lease requires, and keep proof of delivery. If you have already renewed by accident, ask the lessor in writing for an early-termination or buyout amount.
Do auto-renewal laws protect my equipment lease?
Generally no. Most state automatic-renewal statutes target consumer contracts, not commercial equipment leases, so the lease’s own notice window controls. Read and calendar it carefully.