What if I Can’t Make My Car Payment?

Car Payment

If you’re a little short on funds, you may be worried about loan default and wondering, “What if I can’t make my car payment?” While your mind may immediately jump to the worst-case scenario, i.e. repossession or a missed payment on your credit report, there are steps you can take to resolve the situation. Although Xpress Cash doesn’t provide car financing services, we’re always ready to offer financing advice. Below, you’ll find our recommendations for what to do if you can’t make car payments.

Can’t Make My Car Payments — What Are My Options?

If you’re struggling to make car payments, considering the following options:

  • Talk to the Lender: If you’re afraid your car is in serious danger of being repossessed, contact your lender and see what can be done. In many cases, lenders are willing to work with borrowers and provide some leeway. They may approve loan forbearance or alloy you to skip a payment or two and then add the deferred amount back onto the loan.
  • Refinance the Car Loan: If you have good credit, refinancing your loan may be your best bet. Refinancing is the process of taking out a new loan to cover the cost of your existing loan. You may be able to refinance your loan through your current lender or you may need to explore your options elsewhere. Either way, it’s a smart way to possibly lower your monthly car payments and interest rate.
  • Find Out if Your Loan is Assumable: Depending on the auto loan or lease, you may be able to transfer your loan or lease to another driver. Assuming the prospective new buyer meets specific credit score and income requirements, they may be able to take over the car loan or lease payments. Discuss with your lender; car loan and lease assumptions aren’t an option in all cases.
  • Sell Your Car: If you can live without your vehicle, consider selling it and using the funds to pay off the auto loan. Even if you’re unable to repay the full loan, the money from the sale will cut a sizeable portion off of what you owe.
  • Relinquish Your Keys: This is known as voluntary repossession. Before you take this route, it’s important to note that the lender may demand the “deficiency,” or the difference between what’s owed on the loan and how much the vehicle sells for at an auction.
  • Allow Your Vehicle to Be Repossessed: Allowing your vehicle to be repossessed isn’t advisable. Not only will your credit suffer, but the costs of repossessing and selling the vehicle may be tacked onto your loan. It’s best to work with your lender and find a solution as soon as you begin falling behind on payments.

Get More Financial Advice from Xpress Cash

If you’re falling behind on car payments, Xpress Cash may be able to offer additional options, such as a cash advance. Don’t hesitate to contact us with questions about our services and what we can do to assist you. Xpress Cash has locations in three states, including Michigan, Idaho, and Wisconsin.