What You Need to Know About Car Payment Breaks

Leland Terry
Published Jun 9, 2025


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.
 
  1. Original Loan Amount: The sum you borrowed.
  2. Interest Rate: The rate at which interest accrues on your loan.
  3. Original Loan Term: How long you have to pay back your loan.
  4. 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.

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