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Auto Loans With No Payments For 90 Days – What You Need To Know

Man standing by his new car
TABLE OF CONTENTS

Prequalify for auto loans in 2 minutes

A car is a big-ticket purchase, so when the time comes to get a new one, it might cause some serious financial strain. The down payment, sales tax, dealer fees and other costs can easily set you back thousands of dollars, and that’s just the price to get out the door. Before you buy, use a car loan estimator to help understand how much cash you need to have to buy the car you want.

How much cash do you need to buy a $40,000 car?

ExpenseCost RangeCost
Down payment10%–20% of the purchase price$4,000–$8,000
Sales tax2%–8.3% (varies by state)$800–$3,320
Title feeVaries by state$4–$85.25
Vehicle registration feeVaries by state$40–$274
Miscellaneous fees (Dealer fee, license plate fee, emissions inspection fee, recording fees, etc.)Can vary by state, county and vehicle type$0–$250+

If you want to buy a $40,000 car, prepare to fork over between $4,844–$11,929.

If you want to leave the dealership with a $40,000 car, prepare to fork over between $4,844–$11,929, most of which can be attributed to your down payment and sales tax.

To address the high upfront costs of buying a new car, some lenders offer auto loans with no payments for 90 days.

No payments for 90 days auto loans are much more common at credit unions than they are at banks. This may be because banks are for-profit companies that often have investors, while credit unions are owned by their members and are not-for-profit.

Top 10 Auto Lenders With No Payments for 90 Days Auto Loans:

  1. Digital Federal Credit Union (DCU)
  2. NIH Federal Credit Union
  3. CAP COM Federal Credit Union
  4. Bloom Credit Union
  5. Pentagon Federal Credit Union (PenFed)
  6. Altra Federal Credit Union
  7. Navy Federal Credit Union
  8. Alliant Credit Union
  9. Schools First Federal Credit Union
  10. The dealer you’re buying the car from (if they’re offering a loan with no payments for 90 days)

NewsFlash

In 2020, many car manufacturers and dealers announced special financing offers in response to COVID-19. These programs allowed borrowers who took out a new auto loan to defer their first payment by 90 days.

What Is an Auto Loan With No Payments for 90 Days?

An auto loan with no payments for 90 days looks a lot like your common car loan. However, instead of making your first payment 30 days after you sign the paperwork on your new purchase, you won’t make any auto loan payments until 90 days later.

Before you sign off on an auto loan with no payments for 90 days, it’s important to read the fine print.

There are 3 Types of 90 Day No Payment Auto Loans:

Payments deferred for 90 days:If you see an auto loan advertising no payments for 90 days, they’re probably offering a payment deferral for 90 days. That means that you’ll need to make up those payments later (plus any applicable interest charges), which can increase your monthly payment or extend the life of your loan.

No Interest, No Payments for 90 days: Lenders may have loans with no interest and no payments for 90 days. So, while you won’t pay interest during the first 90 days, you’re still just pushing off the principal amount you owe. These loans are usually less common, and may have stricter credit requirements. 

Payments waived for 90 days: Sometimes, dealerships will waive payments altogether to sweeten the deal for new car buyers. Waiving payments is the best option for borrowers since those payments won’t have to be made up later, and won’t incur any interest charges. In essence, if a dealership waives your payment, it’s like they’ve paid if on your behalf.

Waiving payments isn’t an offer that comes around every day, though. In 2020, in response to the COVID-19 pandemic, Ford combined payment waivers and payment deferrals to attract buyers with the promise of a new car complete with up to six months of no payments.

Why Are Lenders Willing to Offer No Payments for 90 Days?

Lenders are willing to offer auto loans with no payments for 90 days because they want to make loans more affordable for borrowers in the early months of the loan. Why do they want to make borrowers feel more comfortable financially? Because that means they can sell more loans and make more money.

When Is Your First Auto Loan Payment Due?

Keys on a calendar that reads "car payment due"
Car Payment Due text with Car key and remote opener on a calendar

Typically, your first car payment will be due 30 days after you sign the purchase paperwork. However, if your auto loan includes a period of no payments (such as a payment deferral or payment waiver), your first payment could be 60, 90 or even 120 days after you sign your new auto loan. 

The exact due date of your first auto loan payment will depend on the terms of your contract. Check your auto loan documents to determine exactly when your first payment is due, and if in doubt, give your lender a call.

What happens if you’re late on your monthly car payment?

If you’re late on your monthly car payment, your lender may charge you a fee. In some cases your lender may offer a grace period, but if you fail to make up your payment within 30 days, your lender can report it to the credit agencies (Experian, Equifax and TransUnion).

Late fees vary by state and lender. For example, in Florida, auto loan late fees cannot legally exceed 5% of your total monthly payment, and can only be incurred after a payment is at least 15 days late. In most states, late fees are between 2%–5% of your monthly payment, but if you want to find the exact laws where you live, you should be able to find the laws posted on your state senate’s website.

A white car being towed on a flat bed down a highway
Car Service Transportation Concept. Tow Truck Transporting Car Or Help On Road Transports Wrecker Broken Car. Auto Towing, Tow Truck For Transportation Faults And Emergency Cars . Tow Truck Moving In Motorway Freeway Highway.

If you’re more than 30 days late on your car payment, your credit score will most likely drop. Your lender will send you notices of nonpayment and give you plenty of opportunities to make a payment and get up to speed on your loan. Eventually, your lender will repossess your vehicle, which usually happens after 90 days of failing to make payments.

FAQs

Can you defer a car payment multiple times?

It’s up to your lender to decide if and how many times you can defer your car payment. Some lenders may be more forgiving, especially if you submit a letter explaining a financial hardship and have a good credit score. Many lenders will allow you to defer two or even three payments if you have a history of making your payments on time, but be sure to check with your specific lender.

How long can you go without making your auto loan payments?

Unless you have permission from your lender to skip or defer a payment, you can’t avoid making your auto loan payments. If your lender offers a grace period (usually no more than 15 days), you can go that long without making a payment, provided you make up your payment before the time is up.

How many times can you skip a car payment?

You can’t technically skip your car payment altogether without the risk of defaulting on your loan. If you skip a single car payment and don’t make up for it, your lender has the right to repossess your car, and in most states, they don’t even need to give you notice.

References:

  1. FORD LAUNCHES NEW ‘BUILT TO LEND A HAND,’ PROVIDING NEW CAR BUYERS PEACE OF MIND WITH UP TO SIX MONTHS OF PAYMENT RELIEF. (2020, March 19). Ford.com. 
  2. Duong, N. H., & English, D. (2020, February 12). Worried about making your auto loan payments? Your lender may have options that can help. Consumer Financial Protection Bureau. 
  3. The Florida Senate. (n.d.). 2011 Florida Statutes
  4. https://www.experian.com/blogs/ask-experian/how-bad-is-it-to-default-on-a-car-loan/
  5. Axelton, K. (2020, October 26). How bad is it to default on a car loan? Experian
  6. North Carolina Consumers Council. (2021, May 29). How late can you make your payments before they negatively affect your credit worthiness? 
  7. Fay, B. (2022, June 20). Car repossession – How it works & how it affects your credit. Debt.org.
  8. Federal Trade Commission. (2021, May). Vehicle repossession. Consumer Advice. 
  9. National Conference of State Legislatures. (2020, February 4). Vehicle registration fees by state.

Jonathan is a writer with over 10 years of experience and a former insurance agent. Jonathan’s focus is to simplify personal finance and help equip you with the tools you need to make smart financial decisions. Despite the criticisms, he remains committed to driving a manual transmission and prides himself on smooth shifting, even in rush-hour traffic.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.

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About the Author

Jonathan Pressman

Jonathan Pressman

Jonathan is a writer with over 10 years of experience and a former insurance agent. Jonathan's focus is to simplify personal finance and help equip you with the tools you need to make smart financial decisions. Despite the criticisms, he remains committed to driving a manual transmission and prides himself on smooth shifting, even in rush-hour traffic.

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