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Key takeaways
- A car payment deferment lets you postpone a payment with your lender’s approval.
- Deferred payments are usually moved to the end of the loan or handled through a payment extension.
- Interest may continue to accrue while your payment is deferred.
- A lender-approved deferment may help protect your credit, but skipping a payment without approval can hurt it.
- Deferment can help with a short-term cash crunch, but it may not solve a car payment that’s too high every month.
If you can’t make your car payment this month, your lender may let you defer it. A car payment deferment lets you pause or postpone one or more payments, usually because of a temporary financial hardship.
But deferment doesn’t erase the payment. In most cases, your lender moves the skipped payment to a later date, often the end of your loan. Interest may keep adding up, and your loan may cost more over time.
Before you ask for deferment, make sure you understand how it works, what it may cost, and whether another option could fit your budget better.
What does it mean to defer a car payment?
Deferring a car payment means your lender agrees to let you pay later. Instead of making your regular payment on its original due date, you postpone it based on terms your lender approves.
Lenders may call this a deferment, payment extension, hardship assistance, or payment postponement. The exact terms depend on your lender and your loan agreement.
In many cases, the deferred payment gets added to the end of your loan. For example, if you defer one monthly payment, your loan may extend by one month. Some lenders may handle it differently, so it’s important to ask before you agree.
How car payment deferment works
The process usually starts with your lender. You’ll need to contact them, explain your situation, and ask what hardship options are available.
Your lender may ask why you need help, whether your hardship is temporary, and when you expect to resume payments. If they approve the deferment, they should explain how many payments you can postpone, whether interest will accrue, and how the deferment will affect your loan.
Don’t skip a payment and assume you can fix it later. Get approval first, and ask for the terms in writing.
Does deferring a car payment hurt your credit?
A lender-approved deferment may not hurt your credit the way a missed payment can. But you need to confirm how your lender will report the account to the credit bureaus during the deferment period.
Ask your lender whether your account will be reported as current, deferred, or past due. Also ask when your next payment is due after the deferment ends.
If you miss a payment without approval, your lender may charge late fees, report the payment as late, or take further collection action. If you’re already behind, it’s still worth calling your lender quickly. The sooner you talk to them, the more options you may have.
When deferring a car payment can make sense
Deferment can make sense when your money problem is temporary and you expect to get back on track soon.
It may help if:
- Your paycheck is delayed.
- You recently lost income but expect it to return.
- You had an unexpected medical bill or home repair.
- You’re recovering from a short-term emergency.
- You need to avoid missing a payment while you sort out your budget.
In these cases, deferment can give you breathing room. It can also help you avoid a late payment if you contact your lender before the due date.
When deferment may not be enough
Deferment is usually a short-term fix. It may not help much if your payment is too high every month or your financial situation won’t improve soon.
Deferment may not be the best option if:
- You don’t know how you’ll restart payments.
- Your car payment no longer fits your income.
- You’re already behind on multiple bills.
- You owe more than the car is worth.
- You’re relying on deferment more than once.
If the payment itself is the problem, it may help to look at what to do if your car payment is too high before deciding whether deferment is enough.
What to ask your lender before deferring a car payment
Before you agree to a deferment, ask your lender these questions:
- Will interest continue to accrue?
- Will I pay any deferment or processing fees?
- Will the deferred payment move to the end of the loan?
- Will my loan maturity date change?
- Will my next payment amount change?
- How will this be reported to the credit bureaus?
- When is my next payment due?
- Can I get the agreement in writing?
These questions can help you avoid surprises later. A deferment may still be the right move, but you should know the cost before you agree.
Alternatives to deferring your car payment
Deferment isn’t your only option. The right choice depends on whether your problem is temporary or ongoing.
| Option | May help if | What to know |
|---|---|---|
| Deferment | You need short-term relief | Interest may accrue, and the loan may last longer |
| Due-date change | Your payment date doesn’t line up with payday | It may fix timing, but not affordability |
| Loan modification | You need longer-term hardship help | Not all lenders offer it |
| Refinancing | Your rate, term, or payment no longer fits | A longer term may lower the payment but increase total interest |
| Selling or trading down | The car is no longer affordable | This can be harder if you owe more than the car is worth |
You can also review other ways to decrease your car payment if your monthly payment no longer works for your budget.
Deferment vs. refinancing: which is better?
Deferment and refinancing solve different problems.
Deferment may be better if you’re dealing with a temporary setback and need to postpone one or two payments. It keeps your current loan in place and gives you time to recover.
Refinancing may be worth considering if your payment is consistently too high, your credit has improved, or you may qualify for a better rate or loan term. When you refinance, you replace your current auto loan with a new one. That could lower your monthly payment, reduce your interest rate, or both.
That said, refinancing isn’t automatically the better choice. A lower monthly payment can come from a longer loan term, which may increase the total interest you pay. Before making a decision, compare your current loan with any new offer, including the APR, term, monthly payment, fees, and total cost.
If you’re weighing your options, it can help to use an auto refinance calculator to estimate how a different rate or term could affect your payment.
Can you defer a car payment more than once?
Maybe. Some lenders allow more than one deferment, but it depends on the lender, your loan status, and your payment history.
Even if your lender says yes, repeated deferments can make your loan more expensive if interest keeps accruing. They can also keep you in debt longer. If you need to defer more than once, it may be time to look at your full budget and compare longer-term options.
Bottom line
A car payment deferment can help if you’re dealing with a temporary cash crunch and want to avoid missing a payment. But it’s not free money, and it usually doesn’t reduce what you owe.
Before you defer your car payment, contact your lender, ask how it affects your loan and credit reporting, and get the terms in writing. If your payment is too high every month, compare deferment with other options, including a due-date change, hardship assistance, refinancing, or selling the car.
FAQs: Defer a car payment
Can you defer a car payment?
Yes, some lenders let you defer a car payment if you’re facing temporary financial hardship. You’ll need to contact your lender and get approval before you skip the payment.
What happens when you defer a car payment?
When you defer a car payment, your lender lets you postpone the payment until later. In many cases, the skipped payment is added to the end of your loan, but your lender may handle it differently.
Does deferring a car payment hurt your credit?
A lender-approved deferment may not hurt your credit the same way a missed payment can. But you should ask your lender how the deferment will be reported to the credit bureaus before you agree.
Do you still pay interest when you defer a car payment?
Often, yes. Interest may continue to accrue while your payment is deferred, which can make your loan cost more over time.
Is a deferred car payment forgiven?
No. A deferred car payment is usually postponed, not forgiven. You’ll still need to make the payment later, either at the end of your loan or according to your lender’s terms.
Can you defer a car payment if you’re already late?
Maybe. Some lenders may still offer hardship options if you’re already late, but your choices may be more limited. Contact your lender as soon as possible to ask what’s available.
How many times can you defer a car payment?
It depends on your lender and your loan history. Some lenders may allow more than one deferment, but repeated deferments can add interest and extend how long you’re in debt.
Is it better to defer or refinance a car loan?
Deferment may be better for a short-term cash crunch. Refinancing may be worth considering if your car payment is consistently too high, your credit has improved, or you may qualify for a lower rate or different loan term.
