The anxiety of managing finances during tough times is all too real. When bills pile up and income feels stretched, deferring a car lease payment can offer a momentary breath of relief. But before you leap into this option, it's crucial to understand the implications fully.
In this article, we'll walk you through the ins and outs of car lease payment deferral, shedding light on its benefits, potential pitfalls, and alternatives.
A car lease payment deferral is an agreement between you and your leasing company to postpone one or more lease payments to a later date.
Whether you can defer a car lease payment largely depends on your leasing company's policies and your specific circumstances. Many leasing companies offer deferral options for customers facing temporary financial hardship, such as job loss, illness, or other emergencies.
However, it's crucial to contact your leasing company as soon as you anticipate difficulty making a payment. Some companies may require documentation or proof of hardship before approving a deferral.
When you arrange to defer payments on your car lease, the lessor agrees to lower your monthly payment for a determined period. The reduction in payment could temporarily mean $0 or just a reduced amount.
When you defer a car lease payment, the missed amount is typically added to the end of your lease term, extending the duration of your lease agreement.
So while a deferral can provide short-term relief by easing immediate financial strain, deferring payments extends the overall duration of your lease, resulting in you paying more in the long run due to accrued interest and fees.
If you opt for just missing your payment rather than communicating with the leasing company, there may be consequences for your credit. If you don’t arrange for a deferred payment and you miss one, your late payments will be reported to lending institutions, and your credit score can take a hit.
When your credit score drops, it becomes harder to borrow. Offers for loans, credit, and future leasing options may come with less favorable terms, including higher interest rates.
The length of time you can defer a car lease payment varies depending on your leasing company's policies and your specific situation.
Some companies may offer short-term deferral options, allowing you to skip one or two payments. Others may provide longer-term arrangements over several months for more significant financial challenges.
Regardless, it's essential to communicate with your leasing company to explore available options and determine the best course of action.
A deferral probably won’t be right for everyone. Use the lists below to think through both sides of the coin.
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If you find yourself unable to make your car lease payment after trying all of the usual tricks (and you have no more subscriptions left to cancel), consider the following alternative options:
You might be in a tough situation, but you’ll get through this.
By communicating openly with your leasing company and exploring available options, you can navigate the situation effectively and make informed decisions that align with your financial goals.
If you’re in a position to buy out your lease so you can be making loan payments rather than lease payments, check out our monthly payment calculator to get an estimate of your new payment amount.
To start the buyout process online, enter your VIN or license plate number.