How Many Days Can a Car Payment Be Late?

Missing a car payment can lead to uncertainty about when penalties begin. Your loan agreement specifies the timeline for late fees, credit score impact, and potential repossession, as these vary significantly between lenders. Understanding these terms is important to know the typical progression of events when a car payment is missed.

Understanding Grace Periods

A grace period provides a short window after the due date to make a payment without immediate penalties. This period is defined in your loan agreement and is not standardized. Some lenders offer a grace period of 5, 7, 10, or even 15 days, while others provide none, making a payment late the day after its due date. Even with a grace period, the payment is technically overdue, but the lender delays applying late fees or reporting lateness to credit bureaus. Always consult your loan agreement or contact your loan servicer to confirm grace period terms.

When Late Fees Apply

Late fees are typically assessed once any grace period expires, or immediately after the due date if no grace period exists. These fees compensate the lender for delayed payment and administrative costs. Late fees vary, often appearing as a flat amount (e.g., $25 to $50) or as a percentage of the overdue payment (e.g., 1.5% to 15% of the monthly payment). State regulations sometimes cap the maximum amount lenders can charge for late fees on car loans. Your car loan agreement stipulates the precise details regarding late fee amounts and when they apply.

Impact on Your Credit Score

Late car payments can damage your credit score. Lenders generally report payments as “late” to major credit bureaus (Experian, Equifax, and TransUnion) only after they are 30 days past due. Payments late by less than 30 days usually do not appear on your credit report, though late fees may still apply. A single payment reported 30 or more days late can cause a notable drop in your credit score, making it harder to secure future credit or favorable interest rates. The negative impact intensifies with delinquencies at 60, 90, or 120 days past due, and a reported late payment can remain on your credit report for up to seven years.

When Repossession Becomes a Risk

Repossession is a severe outcome of prolonged car payment delinquency. While a lender technically has the right to repossess a vehicle after one missed payment, most typically wait until the borrower is significantly past due, often after 60 to 90 days of non-payment. There is no universal timeline for repossession; it depends on the lender’s policies and your loan agreement. Lenders are often not legally required to provide advance notice of repossession in every state, though some may send notices of default. If a car is repossessed and sold, the borrower may still be liable for a “deficiency balance,” which is the difference between the sale price and the remaining loan amount, plus any associated fees.

Steps to Take if You Can’t Pay

If you anticipate difficulty making a car payment, contact your lender proactively. Reaching out before your payment becomes severely overdue increases the likelihood of finding a workable solution and avoiding negative consequences. Many lenders offer options to assist borrowers facing financial hardship, such as a payment deferral or a loan modification. A payment deferral skips a payment and adds it to the end of the loan term, while a loan modification changes the loan terms for more manageable payments. Early engagement demonstrates good faith and can help preserve your credit standing, preventing escalation to late fees, credit score damage, or repossession.