Has anyone got an offer to skip a car payment for the month

[Palooka]

I get this in the mail every few months because of my good credit. I got one for December and I am really thinking about skipping it so I can have money for Christmas and we also have to pay personal property taxes.

I would have an extra 308.00 for the month. I am cutting way back on Christmas this year. (I always say that, heh)

My interest is 5%. I did read the fine print on the back and it just made it sound like the interest would be added onto the last payment. I probaly owe another year and a half on the car.

Curious if anyone has had this offer and you took it. Do you think it would be a good idea? I am trying to not use that darn credit card!

[mikandmari]

I did this before. It's better than using a credit card, and at the 5% rate you have, probably a lot cheaper. It was a little frustrating at the end of the loan, when I had an extra month's payment to make! It may also not be a good idea if you loan is more than the car is currently worth.

But, what you could do is skip the payment, and then in a few months if you can, start adding a little to each payment until you make up the $308. Then you will be right on track, except maybe a few cents interest!

[Squirt]

Keep in mind that you will be paying 5% interest on that $308 for a year and a half. They tack it on to the end of your loan. It isn't so much a reward for having good credit as it is a way of them squeezing more interest out of your loan.

If you put it on a credit card, you can pay it off whenever you are able without waiting the year and a half. Also consider whether or not there is a fee for deferring the payment.

[sdrjeolsen]

We've had the offer before...on our mortgage. Talk about a tempting chunk of money, but I chose not to do it, becasue of the interest still accruing. 5% is a good rate though. However, if it was me, I'd just keep plugging away. I agree with squirt, it is just a ploy to squeeze a bit more out of you in the end.

Take a hard look and see if you could get by without it. I'm guessing you can, because what would you have done if they didn't make the offer?

Either way, its not a whole lot more interst, just the 308 at 5% for a year and a half....which would be 23.94 extra.

[Palooka]

Thanks guys for the good info. I really need to think if this would be the right thing to do.

[McD]

This is something our bank offers to customers in good standing. We have a 50$ fee to skip the payment, plus we get extra interest income.