When a guitar student has become proficient in the basics of playing he must ask himself: for how long should I continue? The parents of the student (if they are paying for the lessons) must ask themselves the same thing. The answer is multi-faceted as it depends on the skills, goals, and temperament of the individual playing, as well as the source of the lessons.
For one thing, there are students who only desire to play basic chords so they can "play around a camp-fire." For them, once they've reached this ability there is no further to go and the decision to stop taking lessons makes sense. But for most students out there this is far too soon for a number of reasons!
Many people don't want to play only basic chords basically--that is with little flair or originality. Few people start with the intention of grasping the raw basics so as to only convince people of mere basic capability. Embellish your chords, learn to rip a little faster, and increase the sophistication of your repertoire. For most people this takes years to develop or hours and hours of rigid practice. People can't get this good after shortly aborting lessons.
One of the goals a teacher should have for their students is to give them independence, that is not only teaching them by rote, but how to figure out new material on their own. It's necessary to train the ear of the student, and instill in them practice techniques that give them the requisite skills to either read music sufficiently or hear a song and play it back. When the student can make advancements on their own they are in a good place. However, it's not suggested to end lessons at this stage. This simply increases their repertoire, skill set and satisfaction with the instrument. Teachers are the most proven way to accelerate learning as well as correct bad habits before they become habitual. But even in the case of the musical autodidact there are more than sufficient grounds for retaining a teacher.
Guitar lessons aren't only about reaching an external goal. It's an ongoing process, and a dynamic bond gets created between teacher and student. This isn't an easy thing to terminate voluntarily. A good teacher is highly skilled and fun, and after such positive experiences it's hard to imagine shutting out the possibility of continuing along this line in the future.
Besides, there's always more you can learn on guitar. When one well runs dry another appears, and it's very rare that a well ever runs dry! There are always alternate skills within a genre of music you can play with more proficiency, or significantly improve your existing skills. If you've developed a left hand capable of doing chords, practice finger-picking. If you're a fine finger-picker, practice with a flat pick. If you're good at both practice soloing. If you're a fine jazz player learn some country riffs. The list goes on.
Perhaps it's possible that you've outgrown your teacher. In this case, recruit one with more expertise. This is a great compliment to you and a testament to your hard work, but it doesn't signify the end.