• Jennifer Snyder

What If I Can't Make My Car Payment?

Bad things can happen to good people. Perhaps you lost your job. Maybe there was a serious accident or illness that has left you with a large medical bill. Maybe you weren't realistic when you purchased the car and got have realized you got in over your head. Whatever the reason, you now find yourself having troubles making your car payment. What should you do?



Contact Your Lender or Refinance

One of the best options you can do, is speak to your lender about your circumstance. They may be willing to defer payment for you for a short period of time to help you get back on your feet. Another option is to refinance the loan. When you refinance the loan, you may be able to get a longer term than your current loan, which could help lower the payments for you. Remember there typically is no prepayment penalty so when things get better, you can always pay more towards principal and pay it off sooner. If you think refinancing might be an option for you, it is best if your not too far out on late payments. If you would like to fill out a refinance application, we might be able to help you.


What If You Do Nothing?

Locking your car in a garage and hiding from the bank may be your first instinct, but may not be the best one. Once you hit 30 days late on your car payment, you can expect to receive a letter and most likely a phone call from the bank. They will continue to call and send you letters until a tow truck shows up in your driveway to take the car away.


Getting your vehicle repossessed is not worth it. Repossession has a very strong negative impact on your credit report. Also, even though the bank took the car, they are going to try and sell it at auction and you may end up still owing money on that car if the auction sales price brings less than what you owed.


Sell Your Car

Another option available to you is to sell your car. Contact your bank and ask them for the payoff amount. This is the amount that is still owed to them. You may find that you can sell your car for more than what you owe. Even if you sold it for what you owe, it's a lot better than having a repossession on your credit report.


Surrender Your Car

If none of the above is an option for you, then you can just hand over the keys. Your credit will still be affected in a negative manner, however not quite as bad as an involuntary repossession. Also, you might be able to work a deal with the bank that the balance you owe after they sell your vehicle will be reduced or completely forgiven.


Not making your car payment is a real problem, but if you continue to do nothing it will become a bigger problem. It is always best to contact your lender and let them know what's going on as they will most likely be willing to help you out as it's in their best interest as well.


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