A car with a monthly payment

Having Trouble Making A Car Payment?

You are not alone. In bad financial times, the car payment is one of the first things that is often skipped or at least delayed. If you are finding that you can not make this months car or truck payment, here are some things that you can do.

1. Call Your Lender

Your lender does not want you to fall behind any more than you do. The first thing that you need to do is call your lender. Call them just as soon as you realize that the payment can not be made. If the payment becomes late, it might be too late.

If your account is in good standing, most lenders will allow you to skip a payment or even two. The payment or payments will essentially be moved to the end of your loan, extending the loan term by another month.

When skipping a payment is not an available option, your lender might allow you to make a reduced payment. Paying just the interest only, for example could lower your monthly obligation enough to get you by.

With some lenders, a simple call will handle the situation and everything can be handled over the phone. Since you are essentially modifying your loan agreement though, many lenders will require you to sign a form and email or fax it back to them.

2. Refinance Your Loan

If you have fair to good credit, you may be able to refinance your loan. Refinancing is usually free and easy. Most lenders do not charge you to refinance your loan and they will do most of the work for you. This option can help you in two great ways.

First, most refinance loans allow you to move your due date back up to 45 days. This will allow you to skip a payment and hopefully get back on track.

Next, refinancing your loan can lower your payment to something that you might find more affordable. Even if your interest rate does not change, stretching the loan out to another full term of payments will lower the monthly fee.

3. Make Your Car Pay For Itself

If you have a car payment, chances are good that you have a vehicle that is capable of working for you. Uber and Lyft make it easy for you to do a little side work with your vehicle. The best part is that you can work whenever you have time. You will make the most money during peak driving hours but you can go with whatever fits your schedule the best.

Uber says drivers make around $25 an hour and the money is deposited into your bank accounts weekly. So, if your payment was around 500 dollars, you would need to work 20 hours a month to pay it. That is just 5 hours a week or 1 hour a day Monday through Friday.

4. Consolidate Your Debt

If you have paid off a considerable amount of your auto loan debt or if it was a small loan in the beginning, consolidating your debt might be on option.

You could take your loan balance plus the thousands of dollars you owe in credit cards and consolidate them into one loan. This would allow you to skip your monthly auto payment and hopefully, lower your overall bills each month. In addition, paying off your credit cards would result in an increase in your available credit. This would raise your credit score. Just be sure not to charge them up again.

5. Transfer Your Auto Debt

If you owe very little on your car or truck and you have a balance available on a credit card, consider doing a balance transfer. The interest might be more than what you are currently paying but it will help you get out of a jam.

In addition, the minimum payment would probably drastically go down. Of course, if you pay just the minimum, it would take you years to pay off the debt so be sure to pay more.

6. Make Your Payment Late

Lenders have different grace periods but many will give you 7 days or more of grace. This is a period where you can make your payment late without a late fee.

Even if you can not make that, you could still make your payment late and simply pay a late fee. Just be sure to make it before it goes 30 days or more late. Once it hits the 30 day late mark, you will officially be in default and your credit score will start to suffer.

7. Trade In Your Car

If you continually find it tough to make your car payment, it might be time to trade down. Consider taking your vehicle in and trading it in for a cheaper vehicle. If you have a lot of equity, you might even be able to get a similar or even better vehicle with a lower monthly payment.

Just like with a refinance, you should be able to push your payment back 45 days. Hopefully, this will give you the time to get caught up.

8. Sell Your Car Outright

If all else fails, you could consider selling your car outright. If you do not really need a vehicle, this could allow you to save a lot of money every month in payments, insurance, fuel and maintenance.

It could also allow you to start fresh by purchasing a cash car with any equity that you have. That would keep you from incurring another monthly payment and would allow you to carry liability only insurance, further saving you money over a financed car.

If you do sell your car o avoid a payment, you will need to go with a company over an individual. This would allow you to sell the vehicle quickly and get that loan paid off. Consider companies like Carmax. They will make you an offer and purchase your car in the same day, maybe in just a few hours even.

Wrapping It All Up

Whatever method that you decide to act on, act quickly. The more you wait, the worse the problem will become and the more likely that it will affect your credit score.

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