Auto Loan Grace Period

Discussion in 'Credit Talk' started by eddunn1, Dec 11, 2003.

  1. eddunn1

    eddunn1 Active Member

    does anybody know if there is a grace period required by law when paying on a vehicle loan? i was looking over the contract for the car i just financed and noticed that it specified no grace period, but neglected to mention what the late charges would be or when they would be charged. it's very vague. all it mentions about the late charge is that it would be assessed according to the state law where the customer lives. i just thought this was odd. every new car i have ever purchased allowed a 10 day grace period, and i always thought it was a legal requirement. thanks for any info. ed
  2. lbrown59

    lbrown59 Well-Known Member

    From what I have read car loans don't generally come with a grace period.
  3. bev3180

    bev3180 Active Member

    Don't know how much it varies between lender but my Cap One Auto loan posts a late fee of $10.00 on day 11 after the due date. They also start calling every day until it is paid. A 30 day late is not reported until day 31.
  4. tonyd

    tonyd Well-Known Member

    Yep it depends on the lender; and every car loan I have had did have grace period. I do not believe ther is any law though.
  5. eddunn1

    eddunn1 Active Member

    i have experienced the same thing....10 day, then on the 11th the late fee kicks in, and reported to the cb on day 30....this was the norm the last three new cars i have owned over the years....that's why i thought this one seemed a little odd. thanks....ed
  6. sam

    sam Well-Known Member

    i asked my credit union. they said up to 14 days is fine, without penalty or derogatory marks past the due date.

    On the 15th day, you'll be punished (in her own words).

    I thought thats pretty cool. I Always pay the car loan in advance as is reduces the interest, but if i needed to ever pay at the last day, i could forward a full payday (due to my choosing the due date) late and it wouldn't be counted against me.

    Choose a good lender, don't get GEORGE'D.
  7. prd2b

    prd2b Member

    Funny thing is I know of a finance company who stated upfront they had no grace period. . .but after the 11th day that's when the calls started and the late fee got added to the account. Sounds like a grace period to me.

    As a matter of fact I was told on one of the cars I owned the first year I had it that they had no grace period, and then after a year of having the car and paying on time she tells me they have a 15-day grace period.
  8. iambroke

    iambroke Well-Known Member

    I don't know if it's a legal requirement but my GMAC car loan allows a 10 day grace period before payments are considered late with a late penalty (payment coupon shows payment on the due date and then payment after 10 days of the due date). I verified this with them when I couldn't make the payment on the exact due date but mailed it and they received it within the 10 days grace period. They said it would not show up on my credit unless it was 30 days past due and that there is a 10 day grace on that loan.

    I also have an auto loan with Chase and I don't know what their policies are as the loan is really new (just got it 2 months ago) and I make online payments so it's not late.
  9. jenz

    jenz Well-Known Member


    credit unions do not have to follow the same rules as banks, banks do not have to follow the same rules as finance companies (non-banks). you get the jist. credit unions can buy deeper, have better rates and grace periods, etc. and No, i do not work for one, i work for a bank.
  10. dario1979

    dario1979 Well-Known Member

    I am not sure if all states are the same but in California you have 10 days from the due date before a late fee of 5%of the unpaid portion of the monthly amount due. True the banks wont report the account to the CRAs until the 31st day but keep in mind you are paying intrest daily on your loan so if you make your payment 9 days past the due date you wont be assessed a late fee but you will be paying intrest for the 30 days that the payment was due in addition to the additional 9 days that you were later. Further more you are still paying intrest on the days in the up coming months payment so essintially you are paying twice the intrest for every day that you are late. also what the banks wont tell you is that this will make your last payment a lot more than what your current monthly payments are. so if at all possible pay your account 10 days early and with an extra 50-100 dollars each month towards the end of the loan you will shave off a few months easy.

  11. eddunn1

    eddunn1 Active Member

    thanks for all the feedback.....looks like everybody has had the same experiences as me with new car loans.....i still haven't heard of one that doesn't give at least the 10 days after it's due....i even had one once thru one of the new car finance companies....i believe chrysler, i may be wrong tho...but they gave me 14 days....i'll ask the loan officer when i get a chance to call....i am curious
  12. sam

    sam Well-Known Member

    make sure you pick out a good date too. Some places want to originate the loan due date on the day you sign the papers, with a 30 day grace (no payment) however most are also willing to move BACK the date of first payment to meet your budget (ie due the 17th,2nd paycheck).

    If you dont specify they will just pick one out of the air or the day you sign. Which can be inconvenient if you get paid twice a month and have a (rent) huge payment on the first segment.
  13. SoParkDiva

    SoParkDiva Well-Known Member

    Re: Re: Auto Loan Grace Period

    I agree. My bank gives a 10 day grace period. I have never gone past it so I don't know what the late fee is. I'm done paying for this car in 6 months! Yay
  14. Hedwig

    Hedwig Well-Known Member

    Re: Re: Auto Loan Grace Period

    My credit union doesn't allow you to pick a date. All loans are due the first day of the month. However, they will transfer the payment from the savings account. So, to get around the problem, just put the money in your savings account whatever date you want the month prior, and leave your savings account alone.

    My car payment is around $280. I put $300 (at least) in the savings every month. Eventually I'll have cushion there so that if something happens I won't have to put in the full amount to have the $280 there on the first.

Share This Page