Can You Skip a Car Payment A Complete Guide to Your Options

Struggling to make your next car payment? You’re wondering if you can just skip it this one time to catch your breath. This financial stress is a common, but serious, situation.

Yes, in many cases, you can skip a car payment, but it requires getting formal permission from your lender through a process called “deferment” or a “skip-a-pay” program. This is not the same as simply missing a payment, which can damage your credit. A deferment moves the skipped payment to the end of your loan, but interest usually continues to accrue.

Based on industry standard practice and an analysis of loan agreements, this guide reveals the exact process. You will discover how deferment works, its true cost, and how to protect your credit score. This will give you the framework to make a safe, informed decision.

Key Facts

• Lender Approval is Mandatory: You cannot simply decide to skip a payment. You must proactively contact your lender and receive formal approval for an auto loan deferment to keep your account in good standing.
• Interest Still Accumulates: Deferment is not free. Your loan’s principal balance continues to accrue daily interest during the skipped period, which increases the total amount you will pay over the life of the loan.
• Credit Scores Can Be Protected: A properly executed, lender-approved deferment should not negatively impact your credit score. The lender agrees to continue reporting your account as “current” to credit bureaus.
• Loan Terms Are Extended: The skipped payment is typically moved to the end of your loan. If you defer one payment on a 60-month loan, it will now take 61 months to pay off.
• Unapproved Skipping Causes Damage: Missing a payment without permission makes your account delinquent. This results in late fees, negative reporting to credit bureaus, and a significant drop in your credit score.

Can You Skip a Car Payment? A Complete 2026 Guide to Your Options

Yes, you can often skip a car payment, but it must be done through a formal, lender-approved process known as a car loan deferment or a “skip-a-pay” program. Simply ignoring your bill is considered a missed payment and will lead to negative consequences like late fees and credit score damage. A deferment is a temporary pause in your payment obligation, not a cancellation of the payment itself.

Think of it as a pre-approved, temporary break. Many lenders offer these hardship assistance programs for borrowers who are in good standing but face a short-term financial challenge, like an unexpected medical bill or temporary job loss. The key is that this is a bilateral agreement; both you and your financial institution agree to modify the payment schedule. The specifics of eligibility and the process are found within your original loan agreement. But what does a deferment actually mean for your wallet and your credit score? Let’s break it down.

What Is the Difference Between Deferment and Delinquency?

The primary difference is permission: a deferment is an approved pause, while delinquency is an unapproved missed payment. Understanding this distinction is the most critical step in protecting your financial health when you can’t make a payment. One is a proactive solution, and the other is a credit-damaging problem.

From years of working with auto financing, we’ve seen how this choice impacts borrowers. For example, Sarah proactively called her lender and arranged a deferment, protecting her credit. John did not, his account became delinquent, and his credit score dropped 80 points. According to the Fair Credit Reporting Act (FCRA), lenders must report payment information accurately to credit bureaus like Experian, Equifax, and TransUnion. Here’s how these two paths differ in what gets reported.

Feature	Approved Deferment (Skip-a-Pay)	Unapproved Missed Payment (Delinquency)
Lender Communication	Proactive; you request and get approval BEFORE the due date.	None or reactive; lender contacts you AFTER the due date.
Loan Status	Remains “Current” or “Paid as Agreed”.	Becomes “30 Days Late,” “60 Days Late,” etc.
Credit Score Impact	Typically none, as long as the account is reported as current.	Negative. Late payments are a major factor in credit scores.
Late Fees	Usually waived, though a processing fee may apply.	A late fee is almost always charged.
Future Consequences	Loan term is extended; total interest increases.	Can lead to collections, higher interest rates, and repossession.

How Does Skipping a Car Payment Affect Your Loan and Total Cost?

Skipping a car payment through deferment makes your loan more expensive and last longer. While it provides immediate cash flow relief, it’s crucial to understand that it is not a free service. The two main financial impacts are the continuous accrual of interest and the extension of your loan term. This is a fundamental requirement under the Truth in Lending Act (TILA), which mandates clear disclosure of loan costs.

How Does Interest Accrue During a Deferment?

During a car loan deferment, daily interest continues to be calculated on your outstanding principal balance. Your loan doesn’t just freeze. For a $20,000 loan at 6% APR, you would accrue approximately $3.29 in interest per day. Over a 30-day skipped payment period, this adds up to around $100 in new interest charges.

Pro Tip: Ask your lender if the accrued interest will be capitalized. If so, this interest is added back to your principal balance. This means you’ll begin paying interest on that new, higher interest, making the deferment even more expensive over time.

Let’s look at a clear example.

Example: $20,000 Loan at 6% APR ($386.66/month payment)

| Scenario | Principal Balance | Interest for the Month | Principal Paid | New Balance |
|—|—|—|—|—|
| Normal Month | $20,000.00 | $100.00 | $286.66 | $19,713.34 |
| Deferment Month | $20,000.00 | $100.00 (still accrues) | $0.00 | $20,100.00* |
| Month After Deferment | $20,100.00 | $100.50 | $286.16 | $19,813.84 |
*Assumes interest is capitalized (added to principal). The total cost of the loan just increased by over $100.

How Does a Skipped Payment Extend Your Loan Term?

When you defer a car payment, that payment is typically added to the very end of your loan, which extends the loan’s maturity date. The payment is not forgiven; it is simply rescheduled. This is a simple but important concept.

Think of your loan as a stack of 60 payment blocks for a 5-year loan. Deferring one payment doesn’t remove a block; it just moves it from this month’s position to a new 61st position at the end of the stack. Consequently, if you skip one payment on a 60-month loan, your loan will now take 61 months to pay off completely. If you defer three payments over the life of the loan, it will take 63 months.

Does Skipping a Car Payment Hurt Your Credit Score?

No, skipping a car payment through an official, lender-approved deferment should not hurt your credit score. During a deferment, your lender agrees to continue reporting your account as “current” or “paid as agreed” to the credit bureaus. This is the single most important benefit of arranging a formal deferment instead of simply missing the payment.

Here’s a common point of confusion we can clear up:
* Myth: Skipping a payment always hurts your credit.
* Fact: Only an unapproved skipped payment hurts your credit; a formal deferment protects it.

Payment history is the most significant factor in your FICO score, accounting for 35% of its calculation. An unapproved missed payment becomes a “30-day late” mark on your credit report, which can cause a significant drop in your score. A deferment prevents this negative mark from ever appearing, preserving your hard-earned credit history. This process is governed by the Fair Credit Reporting Act (FCRA), ensuring lenders report your account status accurately based on your agreement.

How Do You Formally Request a Car Payment Deferment? (Step-by-Step)

To request a car payment deferment, you must proactively contact your lender, explain your hardship, and get a formal agreement in writing. In our experience, being organized and communicating clearly is the key to a smooth process. Follow these steps to navigate the request successfully.

Step 1: Review Your Loan Agreement

Before you even make a call, find your original auto loan contract. Many lenders include their “skip-a-pay” or deferment policy directly in the paperwork. Look for sections on “Hardship,” “Deferment,” or “Extensions.” This will tell you if you’re eligible and what the general process is.

Step 2: Contact Your Lender (Proactively)

Do not wait until your payment is due. Contact your lender’s customer service department at least one to two weeks in advance. This provides enough time for them to process your request. Have your account number and loan details ready before you call to make the process faster.

Step 3: Clearly State Your Case and Make the Request

When you speak with a customer service representative, be direct. Explain that you are experiencing a temporary financial hardship and would like to formally request a one-month payment deferment. Be prepared to briefly explain the situation (e.g., unexpected medical expense, temporary reduction in work hours).

Step 4: Understand the Terms (Fees and Interest)

Ask specific questions to ensure you understand the full cost.
* “Will interest continue to accrue during the deferment?”
* “Is there a processing fee for this skip-a-pay option?”
* “Will the accrued interest be capitalized?”
* “Can you confirm this will not be reported as a late payment to the credit bureaus?”

Step 5: Get the Agreement in Writing

This is the most critical step. Do not consider the deferment official based on a verbal promise. Ask the representative to send you a formal deferment agreement via email or mail.

Pro Tip: An email confirmation is good, but a signed PDF agreement is better. Do not consider the deferment official until you have this document in your hands. Review it carefully, sign it if required, and keep a copy for your records.

What Are the Deferment Policies of Major Auto Lenders?

Deferment policies vary significantly between lenders like Capital One Auto Finance, Navy Federal, and Ally Financial. It is essential to check directly with your specific financial institution, as their rules, fees, and eligibility requirements can change. The information below is a general guide based on industry analysis, but you must verify it.

Lender	Typical Deferment Availability	Known Fees	How to Apply
Capital One Auto Finance	Often available for eligible customers facing hardship. Typically requires a good payment history.	May vary; some customers report no fee.	Online account portal or phone call.
Ally Financial	Known for flexible options, but deferment is on a case-by-case basis.	Fees are possible; must be confirmed.	Primarily through phone contact.
Navy Federal Credit Union	Often has a formal “Skip-a-Pay” program for members, sometimes advertised around holidays.	A processing fee (e.g., $25-$50) is common.	Online banking portal or mobile app.
Chase Auto	Offers hardship programs, but specifics are not always public. Eligibility is determined after contact.	Must be discussed with a representative.	Phone call to their auto loan department.
Toyota Financial Services	May offer payment extensions or deferrals depending on the customer’s situation and state regulations.	Varies by program.	Through their online portal or by phone.

Disclaimer: This table is for informational purposes only. Policies can change at any time. Always contact your lender directly to get the most accurate and current information about their deferment options.

What Are the Best Alternatives to Skipping a Car Payment?

Before committing to a deferment, you should evaluate alternatives like refinancing, a personal loan, or even selling the vehicle. Deferment is a tool for short-term problems. If your financial difficulty is likely to last more than a month or two, one of these other options may be a more sustainable solution.

Here is a comparison of your main alternatives:

Option	How It Works	Pros	Cons	Best For…
Deferment	Pause one or more payments, moving them to the end of the loan.	Protects credit; provides immediate relief.	Increases total interest; extends loan term.	A temporary, one-time cash flow shortage.
Auto Loan Refinancing	Get a new loan with better terms (lower interest rate or longer term) to pay off the old one.	Can significantly lower your monthly payment.	Requires good credit; takes time to process.	Someone whose credit has improved since they got the original loan.
Loan Modification	Permanently change the terms of your existing loan with your current lender.	Can lower payments without a new loan application.	Hard to get approved; may require significant hardship proof.	Long-term financial changes where you can no longer afford the original payment.
Selling the Vehicle	Sell the car to a private party or dealer and use the proceeds to pay off the loan.	Eliminates the payment and insurance costs entirely.	You lose your transportation; may have a deficiency balance if you’re “upside-down.”	A severe financial crisis where the car is no longer affordable.

What Happens If You Miss a Car Payment Without Permission?

Missing a car payment without your lender’s approval triggers a cascade of negative consequences, starting with late fees and ending with the risk of repossession. This path, known as delinquency, is financially damaging and should be avoided at all costs.

Here is the typical timeline of what happens:
1. Immediately After Due Date: Late Fees: The moment your payment is past its due date (or grace period), the lender will charge a late fee, typically between $25 and $50.
2. After 30 Days: Credit Damage: Once the payment is 30 days late, the lender reports it as a delinquency to the credit bureaus. This single negative mark can cause your credit score to drop by 50-100 points or more.
3. After 30-60 Days: Collection Calls: Your lender will begin calling you frequently, demanding payment. If the delinquency continues, they may transfer the debt to a collections agency.
4. After 60-90 Days: Risk of Repossession: Most loan agreements allow the lender to begin the repossession process after two or three missed payments. This can happen without warning. If your car is repossessed and sold for less than you owe, you will still be responsible for the remaining “deficiency balance.”

FAQs About can you skip a car payment

How many payments can you skip on a car loan?

Typically, lenders allow you to skip one or two car payments per year, with a lifetime maximum of four to six deferrals over the entire loan term. This is not a universal rule; the exact number depends entirely on your specific lender’s policy and your payment history. Always check your loan agreement or contact your lender for their specific limits.

Does skipping a car payment hurt your chances of refinancing?

It can. While a single, approved deferment is unlikely to be a major roadblock, multiple deferrals can signal financial instability to a new lender. Lenders reviewing a refinance application prefer to see a consistent, on-time payment history, and frequent use of deferment may make you appear to be a higher-risk borrower.

Can you skip a car payment if you have bad credit?

It is more difficult, but not impossible. Lenders are less likely to approve deferment requests for borrowers with a history of late payments or a low credit score. However, if you have been making consistent payments recently and have a legitimate reason for the request, some lenders may still grant a deferment as a way to avoid a more costly default.

What is a skip-a-payment fee?

A skip-a-payment fee is a one-time processing charge that some lenders, particularly credit unions, apply when you use their deferment option. This fee typically ranges from $25 to $75 and is separate from the accrued interest. You must confirm the existence and amount of this fee with your lender before agreeing to a deferment.

Can you skip a car payment on a lease?

It is generally much more difficult to skip a payment on a car lease compared to a loan, and often it is not allowed. Lease agreements are typically less flexible. You must contact your leasing company immediately to inquire about any possible hardship provisions, but do not assume a deferment option is available.

How long does it take to get a car payment deferred?

Approval can be instant if done through an online portal, but it can take several business days if it requires manual review by a loan officer. This is why it is critical to contact your lender at least one to two weeks before your payment is due to ensure the request can be processed in time.

Is it better to use a credit card for a car payment instead of skipping?

Generally, no. Using a credit card to make a car payment is a very expensive alternative due to high interest rates. A credit card’s APR (often 20% or more) is almost always significantly higher than your auto loan’s rate. This should only be considered an absolute last resort if deferment is not an option.

Can you skip two car payments in a row?

This is highly unlikely to be approved. Most lenders require at least one or more on-time payments between deferral periods. Lenders offer deferment for temporary, short-term hardship. Requesting to skip consecutive months often indicates a more serious financial issue that deferment is not designed to solve.

Can I skip a payment if I’m already late?

Probably not. Deferment and skip-a-pay programs are designed for accounts that are current and in good standing. If your payment is already late, you are considered delinquent. You should still contact your lender immediately to discuss workout options, but you will likely not be eligible for a standard deferment program.

How soon can you defer a car payment after buying a car?

Most lenders require a minimum number of on-time payments before you are eligible for deferment, typically between 6 and 12 months. You generally cannot defer the first few payments on a new loan. Check your loan agreement for the specific eligibility requirements set by your lender.

Key Takeaways: Skipping a Car Payment

• Formal Deferment is Key: You can only skip a car payment safely through a lender-approved deferment. Simply not paying is called delinquency and will damage your credit score and lead to late fees.
• It Is Not Free: Deferment is not a free pass. Interest continues to accrue during the skipped month, which increases the total cost of your loan over its lifetime.
• Your Credit Is Protected (If Done Right): An approved deferment should not negatively impact your credit score because lenders agree to report your account as “current.” This is the primary benefit over missing a payment.
• Action is Required: You must be proactive and contact your lender well before your payment is due. Do not wait until the last minute. Review your eligibility, state your case, and get the final agreement in writing.
• Your Loan Term Will Be Longer: The skipped payment is moved to the end of the loan, extending your loan term. A 60-month loan will become a 61-month loan if you skip one payment.
• Know Your Lender’s Policy: Every lender has different rules. Major banks, credit unions, and auto-specific financiers (like Capital One or Toyota Financial) have unique eligibility requirements, fees, and application processes.
• Evaluate All Alternatives: Before deferring, consider other options like refinancing for a lower payment, a personal loan for temporary help, or modifying your loan. Deferment is a short-term solution for a short-term problem.

Final Thoughts on Skipping a Car Payment

Navigating a financial tight spot is stressful, but understanding your options is the first step toward taking control. Skipping a car payment through a formal deferment can be a valuable and safe tool to weather a temporary storm without damaging your credit. It is a bridge, not a destination.

The key is to be proactive, communicate clearly with your lender, and fully understand the costs involved—namely, the accrued interest and the longer loan term. By treating deferment as a calculated financial decision rather than an emergency escape button, you can use it wisely to maintain your financial stability and keep moving forward. You have the knowledge now to make the best choice for your situation.