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Don’t Fall Behind on Your Car Payments!

What to Do If You Can’t Afford Your Car Loan Anymore?

You did all the research and you saved up the money to put a substantial downpayment on a pre-owned car, truck, or SUV. Things are going great until you hit a financial snag of some kind and can no longer afford your car loan. So, what can you do if you can’t pay your car note anymore? To be sure, this isn’t an ideal situation. Missing a car payment can lead to serious financial consequences, including eventual repossession. Let’s take a look at some options to mitigate the damage to your credit.

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Contact the Loan Provider For Assistance

If you feel like your money troubles are just temporary and you just need some additional time to make the payment, contact the loan provider. Nobody wants to take the vehicle away from you. There are a few options loan providers have available to help people, including granting a payment holiday or temporarily extending the payment due date. The most important thing to remember if you’re in this situation is don’t wait until the last minute. Give yourself and the loan provider time to find a solution.

Refinance the Loan

Borrowers who have been making on-time payments for a long time could be in a position to refinance the car loan in order to avoid repossession. Refinancing the loan will lower the payments but will likely add more payments in addition to raising the interest rate. This could be the best possible outcome for a person in the right situation.

Sell The Car to Someone Else

If you know that your financial struggles aren’t going away in the near future, selling the vehicle might be your best option. In a perfect world, the sale amount will cover the remaining balance. However, if it doesn’t, you will still need to pay off the amount you owe to the loan provider. 

Voluntary Repossession Explained

Let’s say you’ve exhausted all of your options, and your financial situation hasn’t improved. Your last resort should be to voluntarily surrender the vehicle to the loan provider. Like, selling the vehicle to someone else, surrendering the vehicle to the provider will still leave you on the hook for paying off the remaining balance. Also, a voluntary repossession will likely have some negative consequences for your credit, but it’s still better than what will happen if the loan provider has to come looking for you.

Davey Auto Sales has a lot of experience helping people with all kinds of credit histories. Our compassionate and experienced staff is ready to help you today. Make an appointment with us if you need a little more information.

Dec 23rd, 2023