Buy Now, Pay Later for Cars? How Deferred First Payments Work in Auto Refinancing

Dakota DeRego
Jul 9
4 min read

“Buy Now, Pay Later” (BNPL) has taken over retail—from furniture and flights to clothes and electronics. But what if you could apply that same concept to your car loan?

Well, you can.

When it comes to auto loan refinancing, many lenders now offer deferred first payments—giving borrowers the chance to skip their car payment for 6 to 10 weeks after closing. It's like a BNPL option for your car loan, and it’s becoming an increasingly popular way to ease financial pressure, especially during transitions or tight months.

In this blog, we’ll break down how deferred first payments work, why they’re trending, and how they can help you reset your finances without giving up your ride.

What Is a Deferred First Payment?

A deferred first payment is exactly what it sounds like: after refinancing your auto loan, you don’t have to make your first payment until several weeks later—usually 45 to 75 days after your refinance closes.

Instead of making a payment right away, you get a grace period before your new monthly payments begin. This gives you time to catch up on other bills, breathe financially, or just enjoy the temporary relief of not having a car payment.

It’s similar to the “Buy Now, Pay Later” model used in retail—but applied to car loans.

How It Works in Auto Refinancing

Let’s say you refinance your car loan today. Here’s what the timeline might look like:

🗓️ Day 1: You apply and get approved
📝 Day 3–5: Your new loan closes and your previous loan is paid off
⏳ Week 6–10: You make your first payment

This deferral period depends on the lender’s terms, but Digital Auto Refi Co works with lenders that offer up to 75 days before your first payment is due.

It’s important to note: interest may still accrue during this period, but the flexibility can be well worth it—especially if you need short-term breathing room.

Why Borrowers Love the BNPL-Style Deferral

More people are taking advantage of deferred payments for one big reason: cash flow relief.

Here’s how it’s helping:

1. 🧾 Catch Up on Other Bills

Skipping a car payment for 1–2 months can free up hundreds of dollars that can go toward rent, utilities, credit cards, or overdue expenses.

2. 🔁 Smooth the Transition Between Loans

If you’re refinancing to lower your rate or change your terms, the deferred period can help you budget without overlap.

3. 🛠️ Cover an Emergency

Deferred payments can help borrowers who need to free up cash for medical bills, car repairs, or sudden life events.

4. 💳 Debt Restructuring Tool

Combining a refinance (potentially lowering your rate) with a payment pause lets you reset your financial situation more smoothly than just switching loans.

Is There a Catch?

While deferred payments can be a great option, here are a few things to keep in mind:

✅ Yes, interest usually continues accruing, even if you're not making payments yet.
✅ Your loan term may not change, so payments could be slightly higher after the deferral period (depending on lender structure).
✅ This is not the same as loan forbearance or skipping payments later in your loan term. This is built into the start of the refinance.

It’s a smart option if you understand how the loan terms work and if you're using the deferral strategically—not as a way to delay inevitable financial strain.

How Deferred Payments Tie into the BNPL Trend

The BNPL movement has exploded because consumers want flexibility and control—and that’s exactly what deferred payments offer in auto refinancing.

In both cases, it’s about:

Giving people time to plan for a new monthly obligation
Making larger purchases or debts more manageable
Easing transitions in spending without taking on more high-interest credit

Auto loan refinancing with a deferred first payment is the vehicle-sized version of Buy Now, Pay Later. And it’s catching on fast—especially among Millennials and Gen Z drivers used to digital, on-demand finance options.

How to Get 6–10 Weeks with No Car Payment

If you’re thinking about refinancing, here’s how to lock in a deferred first payment:

Check your eligibility at DigitalAutoRefi.com
Select a lender that offers a 45–75 day deferral window
Close your new loan and confirm the deferral terms
Use the payment-free period to catch up, save, or shift your budget

At Digital Auto Refi Co, we partner with lenders offering up to 75 days before your first payment—and it all starts with a quick online application. No credit impact just to check your rate!

Final Thoughts: The Smart Way to Refi with Breathing Room

If you're looking for flexibility, faster approvals, and real financial breathing room, auto refinancing with a deferred first payment could be your perfect BNPL-style solution.

It’s not just about skipping a payment—it’s about setting yourself up for better control, better timing, and better overall financial health.

👉 Ready to refinance and take a break from your car payment?Apply in minutes at DigitalAutoRefi.com and see how much you could save—plus how long you could go payment-free.