Buying a new car is an exciting experience. Driving off the lot with that new car smell is a feeling like no other. But that excitement can quickly turn to stress when the first payment comes due. Many new car owners are caught off guard when that first bill arrives in the mail. So when exactly is your first payment due after buying a car? Let’s take a closer look.
The Typical Timeline
For most people financing a new car, the first payment is usually due within 30-45 days after finalizing the paperwork and driving off with your new wheels Many car dealers and lenders provide a 30-day grace period before the first payment is due This gives you time to get your financing and paperwork in order before having to make that first payment.
According to experts, the industry standard is for the first payment to be due approximately 45 days from the purchase date. However, this can vary depending on your specific lender and the terms you agreed upon. It’s important to carefully review your financing contract to know exactly when your first payment will be due. Don’t just assume you have 30 days – make sure to double check.
The Auto Loan Grace Period
One of the key factors that determines when your first payment is due is the grace period on your auto loan, The grace period refers to the number of days you have after finalizing your loan until that first payment is due Grace periods typically range from 30-45 days
For example, if you have a 30-day grace period on your auto loan, your first payment would be due 30 days from the date you signed the final loan paperwork. If you have a 45-day grace period, you would have 45 days before making that first payment. This grace period allows you some breathing room to get your finances in order.
Some lenders may not offer any grace period at all. In those cases, your first payment would likely be due by the first month after purchasing your vehicle. It all comes down to reading the fine print of your specific auto loan agreement. Don’t assume there is a 30-day grace period – make sure to verify with your lender.
Beware the First Payment Default
While that first payment due date usually falls 30-45 days out, it’s critical that you pay very close attention to that deadline. If you miss or are late on that first payment, it can seriously impact your credit score and loan terms.
This is known as a first payment default. If you default on your first payment, your lender will report this to the credit bureaus right away. One late payment can cause a 90-120 point drop in your credit score instantly. On top of damaging your credit, your lender may hit you with hefty late fees or other penalties.
First payment default can also allow the lender to repossess the vehicle immediately in some cases. Usually there is a 90 day period before repossession, but first payment default overrides that in many contracts. Don’t let a simple mistake on your first payment haunt your credit and finances for years to come. Mark that first due date on your calendar and make sure the payment is ready on time.
Options If You Can’t Make the First Payment
Sometimes unforeseen circumstances arise that may prevent you from making that first payment on time. If you find yourself in this situation, don’t just miss the payment date altogether. You have options to potentially defer or modify your payment.
As soon as you realize you may not be able to make the first payment on time, get in touch with your lender immediately. Explain your financial situation and ask about deferring your first payment by an additional 15 or 30 days. While they may charge a small fee for this, it’s likely better than completely defaulting.
You may also ask the lender if they can modify your monthly payment amount. Providing evidence of financial hardship may allow you to lower the monthly payments. Just get in touch with the lender before that due date and explain that you need some temporary adjustments.
Other Factors that Impact First Payment Date
Beyond just the standard 30-45 day grace period, there are a few other factors that can influence when your first payment is due after purchasing a car:
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Down payment amount: The larger your down payment, the quicker your first payment may be due. Minimum down payments may get the full 30-45 day grace period, while 50% or more down may shorten that timeframe.
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Your credit score: Consumers with excellent credit scores above 700 may qualify for slightly longer grace periods of 45-60 days. Subprime borrowers with lower scores may have less time before the first payment.
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Purchase date: If you purchase late in the month, your first 30 days might roll into the next calendar month, essentially giving you 60+ days if timed right. Purchases earlier in the month will have a standard 30-45 day grace period.
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Holidays: Major holidays like Christmas and the 4th of July may allow for a few extra days before your first payment. Lenders recognize these holidays often strain finances.
While the standard is 30-45 days, keep these factors in mind as they could result in a slightly shorter or longer timeframe for your first payment. Refer back to your loan documents for the exact terms.
Final Tips for Managing Your First Car Payment
To recap, here are some key tips to keep in mind regarding that crucial first payment:
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Carefully review your loan agreement and highlight the exact due date of the first payment. Don’t just assume 30-45 days.
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Mark the due date prominently in your calendar and set payment reminders leading up to it.
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Have the full payment amount ready in your bank account at least 5 days before the due date. Processing times can vary.
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If you may not be able to pay on time, immediately contact your lender to discuss options. Don’t just skip the payment.
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Make absolutely sure that first payment is on time to avoid severe credit score drops and penalties from first payment default.
When is my first payment due for my auto loan?
Your first payment is due on the 30th of the month following the month you use your auto loan. For example, if you use your loan during September, your first payment will be due on October 30.
When is my first mortgage payment due?
FAQ
When buying a car, when is your first payment due?
When is the First Payment Due? Your first vehicle payment is due sometime between 30 and 60 days from the loan’s finalization date. The specific due date will be listed on your Promissory Note.
How long after you buy a car do you make payments?
Your first car payment is usually due 30 to 45 days from the day you complete the paperwork. You may be asked whether you want to sign up to make automatic loan payment withdrawals from your bank account; many lenders offer autopay discounts.
What is the 20/4-10 rule for buying a car?
The 20/4/10 rule is a guideline for car buying that suggests a responsible approach to financing.
How much is a $30,000 car payment for 60 months?
How long after buying a car is your first payment due?
How long after you buy a car is your first payment due? The due date of your first payment really depends on the lender and the terms you have agreed to, but the vast majority of lenders set the first payment date of an auto loan at 45 days after the paperwork is signed.
When should I make my first car payment?
The due date of your first payment really depends on the lender and the terms you have agreed to, but the vast majority of lenders set the first payment date of an auto loan at 45 days after the paperwork is signed. How do I make my first car payment? Step 1: Complete a pre-authorized debit form with your lender.
How long after buying a car do you get a bill?
Generally it’s 30 days from the date of purchase, but can differ. Usually 30-45 days after you sign. When I recently bought my car it wasn’t until 60 days after. Entirely negotiable. Typically 30-60 days after buying. Don’t worry. You’ll get a bill. If you are getting a loan, at the end of 1st month. Could be 30-45 days from purchase.
What if my car loan payment is 30 days late?
It’s especially important to talk to them before your payment is 30 days late and likely to be reported to the credit bureaus. Some lenders have auto loan hardship options — such as defering a payment to the end of the loan — which can help you catch up and avoid having an auto loan delinquency on your credit report.
How long does it take to get a car loan?
This could take a few days to process, and it may take one to three business days for your funds to show up in your account. From start to finish, it can take up to a week to receive a car loan from an online lender. The approval time for car loans from banks and credit unions varies. Does first car payment come mail? Answer provided by.
How long does it take to make a loan payment?
Different lenders have different policies regarding the first payment due date. While some lenders may give you up to 45 days, others may require the first payment within 30 days. It’s critical to verify the precise due date by consulting your loan agreement or getting in touch with your lender.