If you extend your car lease, you are basically concluding your first lease and then starting again. The monthly car payments will be much less for the new lease as the car will be used not new. There are, however, a few things to consider before deciding on this option.
Look at the various end of lease options to decide whether extending the lease is right for you. If you really want to keep the car you have but don't have the money to make car loan repayments, then this might be what you want.
Look at the record of maintenance for your car. If you have been diligent and taken care of your car, then it makes a lot of sense to extend the lease on your car rather than lease another. You are aware of how well your car has been maintained but you have no way of knowing just how well another used car has been maintained.
Talk to the dealership about extending your lease and get an estimate on extending the lease. Compare the estimate to payments you would be required to pay on a new car that is similar. If you would have to pay monthly payments that are only marginally lower than for the new model then extending just isn't going to be worth it.
Get a quote from a leasing company that is separate from the dealership you are currently with, if you're not impressed by the dealer's terms. It is possible to save money on the lease payments if you can get outside finance.
Consider purchasing the car if you would prefer to keep it rather than leasing again. If you purchase a car that is off-lease you get it for the residual value; remember, however, that it is possible to negotiate this price. Check out the market value on similar cars to see if the residual value is less. In the event that it is, then this a good way to go.
If you are having trouble keeping up the monthly payments for your lease and can't transfer the lease, you may be able to broaden the term on your lease in order to lower the payments. Tread carefully with this option though, as the payments may not decrease by very much and you will be tied into having responsibility for the car for an even longer term.