Payment Deferral

A payment deferral in auto finance is an arrangement where the borrower’s payments are postponed for a certain period, often as a promotional offer like “no payments for 90 days.” In Canadian dealerships, these deferral programs are sometimes used to entice buyers, typically sponsored by lenders or manufacturers during special promotions. It’s important for staff to clarify that, in most cases, interest still accrues during the deferral period, meaning the customer will either have slightly higher subsequent payments or pay more over the life of the loan. Payment deferrals can help customers manage immediate cash flow (for instance, not having to pay until after a new job starts), but dealerships ensure customers understand the terms to avoid confusion later.