Can You Defer a Car Payment?

St. Louis-area drivers at risk of losing their car need to act quickly. For many, this means asking questions such as “Can you defer a car payment?” or even “How often can you defer a car payment?” While the answers vary for each driver and lender, there are many acceptable reasons to defer a car payment or ask for payment deferment on a car loan.

The answer to “Can you get a car payment deferred?” depends mostly on the lender and your type of car loan, whose particular practices and protocols for ensuring repayment may not allow for payment deferment on a car loan. That being said, if you have a good rapport with your lender and you are proactive about discussing your individual situation, they will likely find a way to defer your payment. Above all, contacting your lender before you miss a payment is essential.

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What is a Deferment on a Car Loan?

First, let’s answer “What is a deferment on a car loan?” Simply stated, a deferred payment on a car loan means the payment you’re unable to make is sent to the end of your loan term. Some auto loan contracts have a deferment policy written into them. If you’re unsure, you can either re-visit the terms of your loan or reach out to your lender directly – you will need to contact them eventually, as their approval is required to get a deferment.

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Is There a Limit to Car Payment Deferments?

The answer depends on your lender, as each one has a unique policy regarding payment deferment on car loans. Some will only give their okay on one deferment, while others allow two or more. Wondering if the limit applies on a yearly basis or to the entire loan term? This will also vary by lender and is a great question to ask when speaking with yours.

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Are There Risks Involved With Deferment?

The answer to “Can you defer a car payment?” is often “Yes,” but some will also want to know – should you defer a payment on a car loan? You’ll need to consider your situation carefully to decide. You can’t choose to miss the payment altogether as an alternative. However, maybe you have a family member or a close friend who could provide some assistance? To help you make a well-informed decision, we’ll shed some light on the various advantages and disadvantages of car payment deferment, below:

• Advantages
  • One of the main reasons to defer a car payment is that you can avoid repossession of your vehicle, which would not only take away your means of transportation but could also have a lasting impact on your credit score.
  • When you make a deferment as opposed to making a late payment, you can avoid paying late fees.
  • Do you have remaining equity in your car? Deferring your car payment could give you some additional time to get it sold.
  • Refinancing your loan could help make your monthly payment more affordable, and deferring a car payment will, again, give you some extra time to do so.
• Disadvantages
  • You will eventually be responsible for making good on your payment, as it is not eliminated but rather sent to the end of your loan term.
  • Depending on your lender, you might still need to pay interest on the month you deferred the payment for.
  • Your auto loan continues to accrue interest while your payment is deferred. This means you could end up paying more interest in the end than you would have if the payment were made on time.

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Keeping Your Car When You Can’t Make Your Car Payment

Many lenders around Herculaneum will have a range of options for borrowers who are unable to make a car payment, so while asking “Can you defer a car payment?” may result in a “No,” keep in mind it’s not your only option to seek out:

• Refinance Your Loan: If you are able to change your loan terms, you may have access to a lower interest rate, a longer auto loan term, and a lower monthly payment. Often this is only available to those with good credit, and it will likely require a third party lender.
• Take Out a Cash Advance: While this is not a long-term solution, a cash advance during a temporary hardship can offer some breathing room. Installment loans may be a good option for some drivers as well, as they offer a longer repayment term.
• Change Your Payment Date: If you only need a short period of time, it may be possible to simply shift the day you make your payments, at the discretion of your lender, of course.

The answer to “How often can you defer a car payment?” is likely only one, but as listed above, there are a number of other possibilities to seek out.

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Saving Your Credit But Losing Your Car

When the above options are not for you, it may be necessary to explore selling your car or another option before your credit takes a hit. Here are some alternative strategies for seeking payment deferments on a car loan:

• Transfer Your Loan to Someone Else: If said person has a great credit history and wants to take over your loan, including making payments, this is a possibility. The car will belong to whoever does assume the loan, but as long as they make the payments, you’ll no longer be liable.
• Sell Your Car: Selling your car to a dealership or a private buyer around Florissant or elsewhere is also an option. If you have enough money from the sale to pay off the remainder of your loan, great! If not, however, you’ll still be responsible for what remains on your car loan. Few options exist for getting out of a car loan without selling your vehicle.
• Voluntary Repossession: Although it is not ideal, it may simply be best to turn in your vehicle to the lender. However, if the lender cannot recoup the value of your loan by selling the car, you will be held accountable for the rest of the balance.

No matter what, it is best not to avoid your lender, as this will result in repossession and be a serious blight on your credit report. While there are plenty of ways to improve a bad credit score, it can be very difficult to rebuild after defaulting on a car loan.

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