Advance Renewal

AAA

DEFINITION of 'Advance Renewal'

Renewal of an agreement prior to its expiry. The agreement may refer to any business arrangement between two entities, from magazine subscriptions and mining claims to internet domains and product licenses. Advance renewal generally offers some inducement to the consumer to renew early, and is usually on the same terms and conditions as the initial agreement. A substantial number of advance renewals may indicate a high degree of customer loyalty.

INVESTOPEDIA EXPLAINS 'Advance Renewal'

Advance renewal benefits both the buyer and the seller of the product or service. The buyer benefits from uninterrupted supply without any disruption, while the seller benefits from the knowledge that demand for the product or service, as well as the income stream from the customer, is more predictable.

RELATED TERMS
  1. Advance Canvass

    A technique used by companies to generate "buzz" in advance of ...
  2. Bargain Renewal Option

    A clause in a lease agreement that gives the lessee the option ...
  3. Renewal Option

    A clause in a lease that outlines the terms for renewing or extending ...
  4. Conversion Privilege

    An insurance policy in which the insurer is required to renew ...
  5. Renewable Term

    A clause in a term insurance contract that allows the beneficiary ...
  6. Guaranteed Renewable Policy

    An insurance policy feature that obligates the insurer to continue ...
Related Articles
  1. Savings

    Is Your Financial Situation Sustainable And Renewable?

    Ensuring long-term financial security takes planning and foresight.
  2. Options & Futures

    Peak Oil: Problems And Possibilities

    Learn a little more about the "non" part of this nonrenewable resource.
  3. Options & Futures

    How Your Annuity Company Determines Renewal Rates

    Find the firm that's right for you by uncovering how it makes its investment choices.
  4. Economics

    What is Value Added?

    Value added is used to describe instances where a firm takes a product and adds a feature that gives customers a greater sense of value.
  5. Economics

    What is a Wholly Owned Subsidiary?

    A company whose common stock is 100% owned by another company, called the parent company.
  6. Economics

    What is the Breakeven Point?

    In general, when gains or revenue earned equals the money spent to earn the gains or revenue, you’ve hit the breakeven point.
  7. Investing

    What's Marginal Revenue?

    In microeconomics, marginal revenue is the additional revenue generated by increasing sales revenue by one unit. Another way of saying this is that the marginal revenue is the revenue generated ...
  8. Investing

    What is the Debt-To-Capital Ratio?

    The debt-to-capital ratio is used to measure a company’s use of financial leverage. The ratio is the company’s total debt, divided by the sum of the company’s equity plus total debt.
  9. Investing

    Understanding Accumulated Depreciation

    Depreciation is a rough approximation, in dollar terms, of the wear and tear on an asset. So the accumulated depreciation is the aggregate of the wear and tear on the asset from all prior time ...
  10. Professionals

    What is Backward Integration?

    Integration happens when one company owns another business in its supply chain.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center