Short Answer: In general, lenders will let you defer payments at least one or two times. The exact number of times you can defer car payments will vary based on the lender, the terms of your loan, and your ability to demonstrate financial hardship. Below, we detail how auto loan payment deferral works and how policies vary by lender.
How Often Can You Defer a Car Payment?
Most auto lenders will only allow you to defer one or two payments. Deferring an auto loan payment means skipping a payment and adding it to the end of the loan period, essentially extending the loan. If you defer payments, the maturity date of your loan will change based on the number of monthly payments you defer.
Keeping open lines of communication with your lender is key to successfully deferring payments. Having a solid payment history, displaying significant financial hardship (e.g., medical emergency, major accident, sudden job loss), and expressing a willingness to repay the loan will increase your chances of success when requesting a deferral.
Keep in mind that if your loan normally accrues interest, it will also accrue interest during the period of deferral. This means that the total cost of your loan will increase; you will pay more in interest than you had initially planned.
When to Defer a Car Payment
Deferral can be a good idea if you are experiencing significant financial hardship, or you are at risk of paying late fees or having your car repossessed. For more information on what can happen if you fail to make a payment, see our articles on the repossession policies of Chrysler Capital, GM Financial, Honda Financial, TD Auto Finance, and Toyota Financial Services.
Many lenders offer deferment options that are built into the loan agreement. If your lender will not allow you to defer a payment, you can also look into other options, such as refinancing your loan.
Will Deferring a Payment Hurt My Credit Score?
If a lender approves your deferment request in advance, or if a deferment option is built into your loan, deferring a payment should not negatively affect your credit score. The major credit bureaus will still consider deferred payments as repaying your loan as agreed. Missing payments without deferral will negatively impact your credit score, so it is best to request deferral as soon as possible.
The process for requesting or applying for a deferral/extension varies by lender. A deferment — or “skip payment” — option might be built into your loan, or you may have to contact the lender directly and provide a letter explaining your temporary hardship. You might also be required to supply updated financial information similar to what you provided when applying for the loan.
Car Payment Deferral Policies by Lender
- Payment deferral allowed? Chrysler Capital doesn’t share the details of its deferral policy publicly; however, you can contact a Chrysler Capital representative if you believe you may need to skip a payment, as noted in the Chrysler Capital FAQs.
- Interest policy: Not specified
- Payment deferral allowed? Yes. Ford Credit will defer a payment or two if you’re experiencing financial hardship. It will review your account before providing an extension.
- Interest policy: Unless you have a 0% APR contract, your loan will still accrue interest. Your next payment due after the deferral ends will include interest from the current month.
- Payment deferral allowed? Yes. GM Financial may offer a one- or two-month deferment to individuals with financial need. You will need to contact GM Financial directly to request an extension. Note that GM Financial only allows deferral for auto loans, not lease payments.
- Interest policy: Interest will continue to accrue as normal, and when you resume making payments, you will need to pay any interest that accrued during the period of deferment before GM Financial will apply payments to the principal loan amount.
Honda Financial Services
- Payment deferral allowed? Sometimes; the Honda Financial Services College Grad Program gives new grads with proof of employment the option to defer the first payment for 90 days. Note that this option is only available for auto loans, not leases.
- Interest policy: You will not accrue interest for the first 60 days; thereafter, interest will accrue at the rate specified in your contract.
TD Auto Finance
- Payment deferral allowed? TD Auto Finance will let you defer a payment if you meet certain eligibility requirements; representatives were unable to share the exact requirements without account information.
- Interest policy: Not specified
Toyota Financial Services
- Payment deferral allowed? Toyota Financial Services will defer or extend payments upon approval for both loans and leases; it will move the payment to the end of the contract. Payment relief is available to those who have a financial need or, occasionally, those affected by natural disasters.
- Interest policy: Interest (except on 0% APR loans) and finance charges will apply during the deferral or extension period.
- Payment deferral allowed? Yes, Wells Fargo will defer payments on a case-by-case basis after evaluating your account history. See our related article for more information on deferments and Wells Fargo’s repossession policy.
- Interest policy: Interest on your loan will continue to accrue as normal.