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Car Lease Payment Deferral: What You Need to Know
Published 2/24/25
Read time: 4 minutes
TL;DR: If you're struggling to make your car lease payment, deferring a payment could provide short-term relief. However, it usually means your lease gets extended, and you may end up paying more in the long run. If deferring isn’t the best choice, there are other options like restructuring your lease, buying it out, or transferring it to someone else.
Managing finances during tough times is no easy feat. When bills pile up and every penny feels stretched, deferring a car lease payment can seem like a relief.
But before you hit the “pause” button, it’s important to understand the full picture. Let’s walk through the ins and outs of deferring car lease payments—what it means, when it works, and when it might backfire.
What is a Car Lease Payment Deferral?
A car lease payment deferral is basically an agreement that lets you postpone one or more of your car lease payments. Sounds good, right? Well, it can be...
Whether or not you can defer your payment depends on your leasing company and your specific situation. Many companies will offer deferrals for those experiencing financial hardships, such as job loss, illness, or other emergencies.
But don’t wait until the last minute—contact your leasing company as soon as you foresee trouble. Some companies might even ask for proof of hardship before agreeing to the deferral.
What Happens When You Defer A Payment?
When you defer a payment, you essentially get a break from paying for a while. Some leases may temporarily reduce your payment to $0, while others might only reduce it to a smaller amount.
However, here’s the catch: the deferred payment doesn’t just disappear. It’s typically added to the end of your lease, meaning your lease term will be extended.
While a deferral can provide a short-term break, it does come with consequences—mainly, you’ll pay more over time due to accrued interest and potential fees.
What Happens if I Don’t Defer a Payment?
If you decide not to request a deferral and simply miss a payment, you’re in dangerous territory. Late payments will be reported to credit agencies, which can cause your credit score to take a hit. A lower credit score means higher interest rates and less favorable terms when applying for future loans, credit cards, or car leases.
So, as tempting as it may be to "skip" the payment, it could cost you much more in the long run.
How Long Can I Defer a Car Lease Payment?
The length of time you can defer a payment depends on the leasing company’s policies and your individual situation. Some companies may allow you to skip one or two payments, while others might offer more extended deferral options for people facing larger financial challenges.
The bottom line: talk to your leasing company early to understand your options.
Pros and Cons
A deferral might sound like a great quick fix, but it’s not always the best solution. Here’s a look at the Pros and Cons:
Pros
- Keep your car: The big win is that your car stays with you, so you don’t have to worry about repossession.
- Temporary relief: Deferring payments can buy you some time and give you a chance to focus on other financial priorities.
- Avoids default: By working with your leasing company to defer payments, you can avoid defaulting on your lease, which could have more severe consequences, such as damage to your credit score.
Cons
- Longer commitment: Deferring payments typically extends the duration of your lease agreement, meaning you’ll be paying for longer than expected.
- Higher Costs: The extension will likely result in higher costs down the line due to accrued interest and fees.
- Limited options: Not every lease agreement allows for deferrals, and there may be restrictions on how long you can defer or how many times.
What to Do If You Can't Make Your Car Lease Payment
If deferring isn’t the right option for you, don’t panic—there are other choices to explore. Here are some alternatives that could help you avoid financial stress:
- Contact your leasing company: Reach out to your leasing company ASAP to discuss your situation and explore other solutions, like payment deferral or restructuring.
- Explore assistance programs: Some companies offer temporary payment reductions, lease extensions, or other forms of assistance for customers facing financial hardship.
- Consider a lease buyout: Depending on your lease terms and financial situation, you may want to buy out your lease with Lease End if your lease term is ending in the next few months. This involves financing through one of our trusted partners like Ally and Capital One.
- Consider a lease transfer: Want to offload your lease? Some platforms let you transfer your lease to someone else, so you don’t have to continue paying.
- Sell or trade-in your vehicle: If a lease just isn’t feasible anymore, trading in or selling your car for a more affordable one could provide financial relief.
Wrapping It Up: Is Deferring Your Lease Payment the Right Move?
Deferring your car lease payment can be a lifesaver in the short-term, but it’s not without its risks. If you need immediate relief, it might be a good option—but be prepared for the long-term consequences, including extended payments and extra costs.
Always weigh your options and consider alternatives like a lease buyout, transfer, or restructuring before making a final decision.
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 in the form below.
If you want to chat through your options with an end-of-lease expert, give us a call at 888-307-5197.
About the author
Rebecca Graham
With over a decade of professional writing experience, Rebecca transforms complex concepts and data into clear, engaging content. When she's not honing Lease End's organic growth strategy, she's fanning the flames of her Wicked obsession, crafting custom candles, or walking Utah’s mountain trails. Connect with Rebecca on LinkedIn.
Lease End's mission is to empower auto lease owners with the technology to easily exit their lease. If you'd like to learn more about the lease-end options available to you, please don't hesitate to contact us. Our expert advisors are always prepared to answer your questions and are committed to finding the right plan for your individual needs.
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