When you stop making your car payments you can expect to get your car repossessed. They don’t come out to your house the day after you miss a payment. So what do they do? What happens after you miss a payment and before they send someone to get the car? Is it possible to prevent the repo man from coming? It is, and here are a few steps to help you figure things out before you even get to the point of missing one payment:
Call your lender and find out if there is any way you can modify your repayment plan. Use the following as a guideline on what you should say. Every situation is different, so use what works for you.
* Tell them that you are unable to may a payment this month. (If this is the first time you are late do let them know.)
* Assure them that you will make a payment as soon as you can, but you would like to modify your payment plan.
* It never hurts to ask if they will let you skip this month’s payment, or possibly lower your payments for a few months.
* Ask them if they will waive the late fee.
Some lenders may let you pay less for a while, or they may even let you miss a payment (this is known as deferment). Any deferment will be added onto your loan balance, causing you to pay more in interest. More interest tacked on is a lot better than losing your car and ruining your credit score.
Refinance you loan. Doing so could lower your monthly payment. You have to have a good credit score to refinance, so keep that in mind.
What if you don’t think you can make any more payments – ever? People lose their jobs all the time and this scenario happens all too frequently. Your best bet is to sell the car if you can. Use the funds to pay off your loan.
The final option would be to give the keys back to the dealer. However, you would still be responsible for the balance owing on the car loan.