What to Do If You’re Struggling to Make Car Payments
If you’ve recently lost your job or experienced some other financial hardship, you might find yourself in the situation of being unable to afford your next car payment. Here are a few steps to take if you find yourself in this unfortunate situation.
Smart Shopper: Apply for vehicle financing
Contact your lender
One of the first things you should do is call your lender. They are aware that 2020 has brought its fair share of financial straits for many people. To this end, quite a few lenders are offering some flexibility and special programs for borrowers that are struggling to make car loan payments.
Speak with the car dealership
Besides talking to your lender, you should also call the dealership that you bought or leased the vehicle from. For starters, ask them if you can trade-in your current model for a cheaper one. The dealer will most likely want you to stay with the brand, says Investopedia’s Daniel Kurt. So, it’s likely that they’ll have a few options to improve the situation while helping you stick with the brand you love.
Refinance the loan
Another route to take is to inquire about refinancing your car loan. Per Kurt, it’s common for some lenders to extend the length of your loan to reduce your monthly payments. Granted, this does mean that you’ll be repaying the loan for longer. But it can provide some temporary relief until you get back on your feet financially.
Have someone take over the loan
You might also explore the option of selling your vehicle and the loan. Kurt suggests placing an ad on eBay Motors or another online market platform to help you find someone to take over vehicle ownership and loan payments.
Sell your vehicle
Yet another solution might be to sell your vehicle. This can be a smart option if you owe more money on the car than it’s currently worth. One way to do this is to take out a personal loan to cover the difference after you pay back the lender, as Kurt advises.
Easy Trade-Ins: Estimate your trade-in vehicle’s value here
Whitney Russell resides in Dayton, though her spirit can be found beach-bumming in Puerto Rico (the land of her half-Puerto Rican heritage). When not crafting car-related content, she can be found chasing after the most amazing toddler in the world, watching her “beaver” of a husband build amazing woodworking projects, hanging out with two crazy dogs, and visiting family and friends. She also enjoys traveling, crafting, and binge-watching period dramas when time allows. See more articles by Whitney.