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.
BREAKING DOWN '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.