Taking a break from your car payment might seem like a relief when times get tough, but it could end up costing you more in the long run.
Many people find themselves struggling to pay back their car loans, contributing to over $1.6 trillion in auto debt in the U.S.
Sometimes, lenders offer the option to postpone payments, a practice known as a "deferment" or "extension." However, these breaks aren't always what they seem.
Dig deeper: Need to Skip or Delay Your Car Payment? Here’s What You Can Do
The Hidden Cost of Pausing Your Car Payments
Though it might feel like a momentary solution, deferring your car payments can lead to owing a significant amount more due to ongoing interest accumulation. Especially for those with less-than-perfect credit, this can mean facing sky-high interest rates and deeper debt.
One company, Exeter Finance, has been spotlighted for potentially misleading practices around these extensions, suggesting that not all borrowers fully understand the implications.
Some folks end up with unexpected, large sums to pay at the end of their loan period, sometimes costing thousands more than anticipated.
Understanding Your Auto Loan Better
There are potential added costs of extending your payments, accounting for interest and time.
- Original Loan Amount: The sum you borrowed.
- Interest Rate: The rate at which interest accrues on your loan.
- Original Loan Term: How long you have to pay back your loan.
- Deferment Periods: Times when you didn't make a payment, pushing it to a later date.
Common Questions and Clear Answers
- What's a Deferment? It's when your lender lets you skip a payment or two, shifting them to the end of your loan period.
- What's the Impact? Though it offers short-term relief, deferments can increase the total amount you owe due to continued interest accumulation.
Our goal is to empower borrowers with knowledge so they can navigate auto loans more confidently and avoid surprises down the line.
-
Get the latest on auto loan relief and other tips by subscribing to our weekly newsletter here!
Related Articles
View all posts
Refinancing Your Auto Loan with Navy Federal...
If you’re looking to lower your monthly car payments or save money on interest, refinancing your auto loan with Navy Federal Credit Union could be a great move. Currently, they are offering a $200 bonus if you switch ...
Gas Prices Jump Globally as Conflict in Middle East Intensifies...
Drivers around the world are waking up to much higher prices at the gas pump. In the United States, the average price for a gallon of gas jumped 11 cents in a single night, reaching about $3.11 per gallon. ...
Struggling to Pay Your Car Loan? How Hardship Programs Can Help...
If you have lost your job, dealt with a medical emergency, or faced a large unexpected expense, keeping up with car payments can be difficult. Luckily, many lenders offer auto loan hardship programs to help ...
New Tax Break: You Could Save Thousands on Your Car Loan Interest...
If you bought a new car recently, you might be eligible for a significant new tax break. A recent law signed by President Trump allows for a "car loan tax deduction," which lets millions of Am...
State Stimulus Checks: Who Will Receive Payments in 2026?...
State governments across the U.S. have slowed down on sending out stimulus checks or direct rebates in 2026. Much of the aid being given out now is tied to programs that started in previous years or to existing...
More Drivers Now Pay $1,000 or More Each Month for Car Loans: What to Expect in 2026...
Buying a car is getting more expensive for many people. According to data from Edmunds, a car website, over 20% of people who bought new cars in the last part of 2025 are now paying a...
