What Happens If I Can’t Make My Car Payments?

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If you know you won’t be able to make your car payment this month, the important thing to do is to be proactive. Life happens and unexpected financial situations occur, but it is important to act now instead of waiting until you have missed several payments.

The first thing you should do if you know you can’t make a payment is to contact your lender. It may seem scary, but your lender should be able to help you work something out. You may be able to get your lender to defer your payments for a month or two if your financial situation is short-term.

If you are having more long-term financial struggles, you will want to talk to your lender about extending your loan term so you can make lower payments each month. This will mostly likely increase your interest rate, but it will give you payments that you can afford to make.

You can also look into selling your car. Whether or not you want to do this depends on how much the car is worth and how much you still owe on the car. You are still responsible to pay back the loan, but if the car is worth around the same amount as what you owe, selling the car could help you cover the cost of the loan.

Ultimately, if you can’t work something out and you can’t make your payments, you will face repossession. This is something to try to avoid because it very negatively affects your credit score. However, there are options for you before repossession. Be sure to talk to an expert and consult your lender to try to find a situation that works best for you and your life.

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