Can You Defer a Car Payment?

row of cars
If you’re at risk of losing your car, you’ll need to start considering your options right away. Most drivers around Michigan and Wisconsin region start by asking the question, “can you defer a car payment?” In some cases at least, the answer is yes!

Lenders utilize varied practices and protocols in order to ensure repayment, so it’s important to note that not all lenders will treat deferment as a legitimate option. However, if you have a good relationship with your lender, and you’re proactive in communicating your issues, most will try and find a way to help you defer your payment. If you run into trouble, the best thing you can do is to call your lender before you miss a payment.

What To Do If You Can’t Make Your Car Payment: Keep Your Car

Failing to pay back your loan can have enormous consequences, but most borrowers have at least a few options beyond deferment. Here are some of the options we recommend to our friends and neighbors:

  • Change Your Payment Date: Even when deferment is not an option, some lenders may allow you to change the monthly date on which your loan payment is due. Altering your payment schedule can give you more time if you’re in a crunch, but it’s certainly not a long-term solution.
  • Refinance Your Loan: Some buyers with good credit will be able to refinance their loan if they run into trouble. Changing your loan terms can get you a lower monthly payment, a longer auto loan term, or even a lower interest rate. Most auto manufacturers tend to avoid changing the terms of the loan, and most of these operations require the intervention of a third party loan company.
  • Take Out a Cash Advance: Personal loans and cash advances may not be a long-term solution, but if you’re suffering a temporary hardship, they offer significant relief. Installment loans are similar, but offer options for a longer repayment term that might be preferable for some drivers.

Drivers in Idaho may also be familiar with title loans. Although this can be a good way to get cash fast, since you’re borrowing against the equity in your vehicle, it’s only an option for those who already own their car! If you’re falling behind on car payments, it’s not the right solution for you.

What To Do If You Can’t Make Your Car Payment: Lose the Car, but Save Your Credit

Losing a car is a nightmare for most drivers, but if you’re at risk of having your vehicle repossessed, it’s important to remain calm. It’s important to understand that there are better and worse ways to go about losing your car — at least as far as your credit score is concerned. In order to avoid the worst effects of negative credit reporting, try out one of the following strategies:

  • Find Someone Who Wants the Car: Some lenders may allow another person with great credit history to take over your loan and start making payments. In this case, the car will belong to whoever assumes the loan, but as long as they can make the payments, you’ll be off the hook.
  • Sell Your Car: If you can’t find someone who’s able to take over your loan payments, selling your car outright, to a dealership or to a single buyer, may be another option. In this event, you’d use the money gained from the sale to pay off what remains on your car loan. However, if a balance remains on your loan even after you’ve sold the car, you’ll still be responsible for that portion.
  • Voluntary Repossession: Sometimes, the only thing you can do is turn in your key to the lender who financed your vehicle. Even in these cases, if the lender can’t recoup the value of their loan by selling the car you’ve turned in, they will almost certainly hold you accountable for the remaining balance.

When you’re falling behind on your car loans, the worst thing that you can do is skip a payment or start avoiding your lender. In these cases, your car will eventually get repossessed, and you’ll have to either let it go or try different strategies to get it back. The involuntary character of the repossession will definitely show up on your credit report.

Rely on Xpress Cash for Advice You Can Trust

Whether you’re dealing with student loans, credit cards, or car payments, the stress can be overwhelming when you’re at risk of falling off track. When you need help, contact Xpress Cash or check in with our blog for more tips.