Can't Afford Your Car Payments? Here's What You Should Do Next
Can't Afford Your Car Payments? Here's What You Should Do Next
Posted on April 3, 2023
Life can change on a dime and it seems fate just loves throwing surprises at us just when we’re relaxing in the calm predictability of daily life. That’s fine in most circumstances but what if life’s changes make it so you can't afford your car loan repayments?
Our auto loans team outlines your options if life changes and you can't afford your car loan payments anymore.
Managing auto loans
Illness, redundancy, furlough, family emergencies or something else entirely. All things that can severely impact our way of life and all things that can happen at any time.
If something happens to you and you can't afford your car payments that used to be an easy bill, what can you do?
Talk to Your Lender
The first thing you can do is discuss it with your lender. Many lenders have options for helping out customers in trouble and your lender may have something that works perfectly.
Make sure to discuss the situation before you miss a payment as they will be much more willing to be flexible than after. Once you miss a payment, you go from being a valued customer to someone in arrears and some lenders treat the two very differently! If you've already missed a payment, please click here.
Refinance the Car Loan
If the situation you’re facing looks permanent, or at least long term, you could refinance the auto loan. As long as you have some equity in the car, you could refinance to a cheaper loan to lower your monthly payments.
If you could afford to repay the loan at this lower rate, everyone gets what they want without any impact on your credit score.
Take a Payment Holiday
If your situation is temporary, say a few months, you could approach your lender and request a payment holiday. This is a pause in your payments while you tackle the situation you find yourself in.
Once the payment holiday is over, you resume the auto loan as normal. The period you had a holiday for is added to the end of the loan and you can continue as normal.
Sell the Car
We get that selling the car is far from ideal but it’s a way out of the situation. Depending on the age and value of the car, you could sell the car, pay off the loan and buy a cheaper car to get you around.
It may only need to be for a few months. Then, when the situation has passed, you can get a newer car.
You can sell privately or sell to a dealership. Our dealerships are paying top dollar for used cars right now so that could definitely be an option. As long as you pay off the loan with the money, everyone walks away happy.
It isn’t a comfortable situation to be in but nothing is impossible. If you’re in danger of falling behind on your auto loan, make sure to talk to the lender first before you take action. You have options and no situation is inescapable!
Contact Unique Chrysler for help, advice and competitive car finance and leasing.