How late can you be on a car payment

how late can you be on a car payment

A growing number of Americans are falling behind on their car payments.1 If this situation is familiar to you, you may wonder how late you can be on a car payment. That depends on aspects of your loan, like the terms, how many car loans you have, and grace period policies. Here, you will learn more about what to do if you have a missed payment on your car loan and how that can affect aspects of your finances, like credit. 

What To Do if You Missed a Car Payment

When is a car payment considered late? A car payment may be regarded as late any time between midnight of the payment due date and a few days after that date. If you find yourself in a situation where you missed a car payment, it’s vital to act quickly. 

Make the Payment as Soon as Possible

Once you’re aware of a late or missed car payment, do your best to rectify the situation ASAP. If you have sufficient funds in your bank account and simply forgot to make your payment, do so immediately. This is because you may be able to pay within your loan grace period and avoid any negative consequences. A loan grace period is a duration of time after a due date when the borrower can make their payment without penalty. 

What Is the Difference Between a Late Payment and a Partial Payment?

Late payments on a car loan occur when borrowers make their monthly installments after their scheduled due date. A partial payment is when borrowers pay some, but not all, of their total amount due. Some lenders may be willing to forego late fees to those who make partial payments if it means avoiding a late or missed payment. However, this is often not the case. 

Reach Out to Your Car Loan Provider

If you know a car payment is coming up but don’t have the funds available to make the installment, talk to your lender immediately. You may be able to get an extension, where you can make your payment a few days after the due date without accruing any fines or penalties. 

What Is the Difference Between Delinquency and Defaulting on Auto Loans?

Delinquency on a loan occurs when a borrower makes a late payment. If left unchecked, delinquency can eventually lead to defaulting on a loan. Loan default refers to when a borrower has missed several payments and is showing no effort to repay their loan balance

While both defaulting and delinquency aren’t great for your credit, a short stint of delinquency will affect your credit less than a loan default. If rectified quickly, delinquency may only affect your credit score for about 30 days. Default, on the other hand, can end up leaving a negative mark on your credit for up to ten years! 

What Happens When You Don’t Pay a Car Loan?

When you’re late on an auto loan payment, you are technically breaking your car lease. Unfortunately, breaking a car lease can come with some pretty serious consequences, like fees, increased rates, or even repossession if the account falls into default. 

Missed Payment Fees 

When you make a late car payment, most lenders will also charge you a late fee. Late car payment fees can range anywhere from a few dollars to a few hundred dollars, depending on how long you let your account stay delinquent. Typically, the longer you wait to rectify a late payment, the more you will have to pay in late fees. Sometimes, if you talk to your lender and make your payment within 24 hours of the due date, they may be able to waive your late fee. However, keep in mind that this isn’t always the case. The only surefire way to avoid late payment fees is to make your monthly payments on time. 

Car Repossession

New data is showing the number of car repossessions is hitting its highest rate in years.2 Consecutive missed car payments can eventually lead to a car loan falling into default. And because auto loans are secured loans, If this happens, lenders may end up repossessing your vehicle. To avoid repossession, ensure that your late payments never get to the point of defaulting on your loan. Paying a small late fee may be far less inconvenient than dealing with your car being repossessed. 

How To Get Your Car Out of Repo

How does the repossession process work, and what can you do to get it out of repossession? First, you may find your car has been towed and taken to an impound lot. While your car won’t be in your possession at this time, it will be in a secure lot that is fenced and locked. From there, you must work with your lender to:

  1. Become current on your car payment. 
  2. Pay the impound lot an impound or repossession fee.

After both the lender and the impound lot have been paid, you may regain access to your vehicle. 

Can Late Car Payments Affect Your Credit Score?

Yes! Late auto loan payments can affect your credit report and credit score. Unfortunately, just one missed payment can negatively affect your credit report for up to seven years. While some forms of delinquency, like deferring a car payment may not hurt credit, missing payments or neglecting them altogether will. 

How much late or missed payments will affect your credit will also depend on the length of time your account is delinquent. For example, making a late payment within three days of the due date may affect your credit for just a month or so, while missing a payment for a longer period of time may stay on your credit history for several years. 

The reason a late or missed payment on a car loan can affect your credit score so significantly is that payment history has the most impact on your overall score. Your credit score is determined by a combination of five different financial factors, they are: 

FactorWeight in Score
Payment History35%
Credit Mix10%
Credit History Length15%
Hard Credit Inquiries10%
Credit Utilization30%

Understand Your Options When It Comes to Your Car Payment 

Making informed financial decisions when it comes to your car payment is important. Check out some helpful advice below. 

Read Your Auto Loan Contract Before Signing

For your own financial protection, always read your car loan agreement before signing. Your car loan agreement will contain all the details of your loan, such as: 

  • Loan amount—car loans can vary quite a bit in amounts.
  • The late car payment fee (several lenders will have their late payment stated in the auto loan agreement. Making timely car payments is key to avoiding these). 
  • Interest rates
  • Loan terms
  • Grace period 
  • Any origination fees
  • Wage garnishment policies 

After reading your contract, ask your lender to clarify any information that doesn’t make sense to you. Once everything looks good, then you can go ahead and sign. 

Try Automatic Car Payments 

Take the pressure off of remembering to make your monthly payment on time by opting for automatic payments. That way, you never have to worry about missing a future payment. 

If you feel confident about the loan details laid out in your contract, autopay may be an extremely convenient option. Just make sure your loan payments fit in with your budget first! 

Manually Make Your Car Loan Payments

If there is some variation in your budget and you don’t want to commit to automatic payments, your next option is to make each monthly payment manually. Making your car payments manually may be the most convenient option if you have an odd payment schedule for your job. You wouldn’t want to accidentally put your bank account in the negative by not having enough money in your account at the time of an automatic payment. If you decide making payments manually is the best option for you, try setting a reminder on your phone or computer so you never forget to make one of your car payments. 

Pro tip: pay more than your minimum amount due each month to pay your loan back early and save hundreds or thousands of dollars on interest! However, before you make one big monthly payment, review your loan contract for early payment penalties, which many auto loans may have. 

Refinance for Better Terms or Rates

What if you are currently locked into an auto loan contract that doesn’t fit your financial situation anymore? An extremely high interest rate or an inconvenient loan term could leave you at risk of racking up late or missed payments! Before this happens, it may be in your best interest to refinance with a better loan. 

By refinancing, you get a completely new loan term, rate, and even funding amount. You could refinance your auto loan and request extra money to take care of other expenses you may be dealing with. While you want to stay away from predatory options like payday loans, there are other convenient installment loans, such as personal loan options that may be great for refinancing. However, keep in mind that with refinancing, there may be an early termination fee with your initial lender.

FAQs on How Late Can You Be on a Car Payment

What is a grace period, and how does it differ across lenders?

A grace period is the duration after a payment’s due date, during which a borrower can still make a payment without facing any penalties. The length and conditions of a grace period can vary based on the lender and the specifics of the loan agreement.

How can I negotiate with my lender to avoid penalties for late payments?

Open communication is key. Reach out to your lender as soon as you foresee a delay in your payment. Some lenders might offer extensions and have a grace period, while others might be willing to waive penalties like late fees if you have a good track record. You may also get the ability to make a partial payment. 

Are there any long-term consequences of making a partial car payment, even if they are accepted by the lender?

While some lenders might accept partial car payments to avoid a missed payment, consistently doing so can affect your creditworthiness and might lead to additional fees or extended loan terms. 
Additionally, a late car payment or multiple can hurt your score and also can come with late car payment fees.

If my car is repossessed with an auto loan, how does it impact my credit, and for how long?

Repossession with an auto loan can hurt your credit score, making it harder to get loans in the future. A repossession can stay on your credit report for several years. 

How can I track the impact of my monthly payments on my credit score?

Your car payments can have an impact on your credit scores because most lenders report to at least one or more credit bureaus. Generally, a late car payment can hurt your score (if your lender decides to report late payments, which many do). And every late payment can remain on record with the credit bureaus for up to seven years. In contrast, timely payments can help it. You can monitor your credit score through credit reporting agencies. 

What are the alternatives if I cannot afford my current car loan payment?

Besides refinancing, you could consider selling the car and paying off the loan, then opting for a more affordable vehicle. Another option might be to lease a car instead of buying, depending on your financial situation.

Final Thoughts From CreditNinja

Understanding your car payment obligations and the potential consequences of late or missed payments is essential to maintain financial stability. At CreditNinja, we believe that by being proactive, regularly communicating with your lender, and exploring options, you can navigate the challenges of car loan commitments effectively. 


  1. Car debt piles up as more Americans struggle to make payments | Fox Business
  2. Data shows car repossessions on the rise after pandemic low | ABC 11
  3. Late Car Payments? Avoid Repossession in 3 Quick Steps | NerdWallet
  4. Car Repossession and How to Avoid It | Student Debt Relief
  5. Is There a Grace Period For Car Payments? | Lantern by SoFi

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