Can You Defer Car Payments?

If you’ve recently found yourself in a financial emergency that required you to reallocate funds and you’re not left with much money in the bank, you might be worried about making your next car payment. Missing your payment altogether isn’t an option, so you may be wondering “Can you defer car payments?” Yes, many lenders will allow their borrowers to defer a car payment to the end of their loan when necessary. Find out how to defer a car payment and more from the finance center at Southern Chevrolet near Virginia Beach below! 

How to Defer Car Payment

First, let’s answer the question, “What is a deferment on a car loan?”

If you know you won’t make your next car payment, you shouldn’t waste any time calling your lender. There are plenty of reasons to defer a car payment, but you shouldbe prepared to have an honest conversation about your current financial situation. They’ll want to know the details as to why you’re asking to defer your car payment to begin with. Bear in mind that, depending on your lender, you may still be required to pay interest when you defer a payment.

How Often Can You Defer a Car Payment?

Each lender has a different deferment policy, so the number of times you can ask to defer a car payment will vary. Some lenders allow only one deferment, while others allow two or sometimes more. Whether this number applies yearly or to your entire loan term will also vary by lender.

Is Deferment the Right Solution?

Before you move ahead with a car payment deferment, ask yourself whether this is truly the smartest solution for your situation. Missing your payment certainly isn’t a viable alternative, but perhaps you have family or a close friend who would be willing to help you out temporarily. Take a look at some of the advantages and disadvantages of deferring a car payment to ensure you make the right decision:

Advantages:

• When you defer payments, you can avoid the risk of repossession. (Repossession not only leaves you without a vehicle but can also severely damage your credit score.) 
• You can avoid paying hefty late fees.
• If you still have some equity left in your car, deferring your payment will give you additional time to sell it.
• Deferring your payment allows you extra time to refinance your auto loan, which can help mitigate issues with making your payments in the future.

Disadvantages:

• Your payment is not eliminated but rather sent to the end of your loan, so you’ll be responsible for taking care of it eventually.
• As we briefly noted above, some lenders require that you still pay interest for the month when you defer a payment.
• Your loan is still accruing interest during your deferment, meaning you might end up paying more interest throughout your loan than you would have if you made the payment on time.

Get More Auto Financing Information from Southern Chevrolet 

If you have more questions about car financing or your existing auto loan, contact us at Southern Chevrolet. You’re also welcome to visit us near Virginia Beach and Chesapeake if you’d prefer to speak to us in person. In the meantime, refer to our financing and insurance information hub for more answers to your questions.