What to Do If You Canít Afford Your Next Car Payment
Your car payment is hopefully the last thing on your mind right now. Staying safe and trying to maintain some level of normalcy is paramount for most people right now. But if you’ve experienced a change in employment during this time, your car payment could become very important to you. It’s going to be OK—you’re not the only one, and your lender probably has your back.
Contact your lender. The first thing you should do is contact your lender and explain your current employment or unemployment situation. No matter where you financed your vehicle, whether through the dealer or your credit union, they don’t want to see you default. Your only responsibility is to reach out.
Lynn Heider, vice president of communications and public relations for the Northwest Credit Union Association said, “Consumers who expect to be impacted financially by coronavirus should contact their credit union to discuss options. Most credit unions have programs in place, allowing members to temporarily skip payments, obtain emergency low-interest loans, and lower interest credit cards.”
The same is true for credit unions across the country. Also, every major auto manufacturer has announced programs to help people who have financed through the dealership.
This isn’t loan forgiveness but a deferment. Somewhere between 90 and 120 days is the most common loan deferment length. Remember that the time you defer will be tacked on to the end of your loan.
Sell your car. Another option is to sell your car. Not the best option, but if you know you can get more than what you owe, it can work. If you’re out of work or working from home and just cannot afford your car at the time, selling may be the best option. You can pay off the loan and make some extra cash at the same time.
The problem is, how do you sell a car when all the dealerships are closed? You can still list it for sale on your own. Some of the online marketplaces also let you sell your car to them. Companies like Carvana will handle the whole transaction online, and you never have to see a person.
Give it back. You can also give your car back to your lender. It might not sound like the best option—after all you’re giving up your car and have nothing to show for it—but if you owe more than the car is worth, it might be your only option. Obviously, it’s in your best interest to look at other options before you give up your vehicle and lose all the money you’ve invested. And even after turning your car back in, you might still owe money.
Giving it back is going to be better for you than the alternative: vehicle repossession. Letting your lender repossess the car is only going to cost more money as the fees to get the car back will be added to your bill.
Make it pay you. Making your car pay for itself could be an option. Delivery services are booming right now. If you’re light on work and need to make ends meet, use your car to help make some extra cash. Sign up to deliver groceries or take-out food.
No matter your situation, make sure you call your lender first. After that, call your dealership. We are all in the same boat right now. A lot is happening that is totally out of your control, so focus on what you can take care of. Contact the people who deal with these things on a daily basis; they are there to help. And like Mr. Rogers would say, “Look for the helpers. You will always find people who are helping.”