Can You Defer a Car Payment?

Payment Deferment on a Car Loan: What to Expect

There are good reasons to defer a car loan, but there are also plenty of reasons to consider other options. Is your financial trouble likely to ease in a short time? If not, deferment only delays the inevitable. 

Lenders will use several different procedures to ensure they’re paid back, and not all of them will consider deferment a feasible solution. However, if you have a good relationship with your lender and communicate your issues clearly, most lenders will try to find ways to help you. First and foremost, call your lender before you miss a payment. Payment deferment on a car loan becomes much more difficult for the driver who waits to act.

What to Do if You Can’t Make Your Car Payment: Keep Your Car

Not paying back your car loan can have enormous consequences. Borrowers looking for reasons to defer a car payment have a few options as well:

• Change Your Payment Date: If deferment isn’t an option, some lenders may allow you to change the monthly due date of your car loan payment. This can alleviate short-term pressure, but it’s certainly not a long-term solution.
• Refinance Your Loan: If you’re in a good credit position, refinancing your loan can help. The options include ending with a lower monthly payment, a longer auto loan term, or a lower interest rate. Most manufacturers will avoid changing loan terms, and most of these operations require an intervening third-party loan company. Before refinancing, it’s a good idea to research interest rates for car loans and find out what counts as a good interest rate.
• Take Out a Cash Advance: Personal loans and cash advances may not be a long-term solution, but can offer some temporary relief. Installment loans are similar, but offer options for a longer repayment term that might help certain Glendale drivers.

What to Do if You Can’t Make Your Car Payment: Lose the Car, But Save Your Credit

Losing your car is always a nightmare, but car repossession is the worst outcome. Not only do you lose your car, your credit takes a major hit. It will definitely affect your ability to obtain loans in the future. Try these solutions to avoid forcible repossession if you absolutely can’t pay:

• Find Someone Who Wants the Car: Some lenders may allow another person with great credit history to take over your loan and start making payments, ending your relationship with the car loan.
• Sell Your Car: Selling your car outright to a dealership or to a single buyer may be your best option. If a balance remains on your loan after you’ve put the proceeds toward your balance, you’ll still be responsible for that portion.
• Voluntary Repossession: Sometimes, the only thing you can do is turn in your key to the lender who financed your vehicle. Even in these cases, if the lender can’t recoup the value of their loan by selling the car you’ve turned in, they will hold you accountable for the remaining balance.

If you’re falling behind on your car loan, the worst thing to do is skip a payment or avoid the lender. If you get in front of the problem with these steps, you will be okay.

Contact Cactus Jack's Auto For Advice You Can Trust

For more information on deferring a car payment, contact our finance department at Cactus Jack's Auto! We have several different locations, including Phoenix. Whether it’s information on reasons to defer a car payment or car buying tips, we’re here to help!