Sometimes, life throws you curve balls and you find yourself wondering, “Can I make my car payments — what are my options?” Whether it’s a one-time occurrence or you feel as though you can longer afford your monthly car payment, there are steps you can take to minimize the damage. Read on for a few tips from the finance center at Mercedes-Benz of Escondido to see what can be done if you find yourself in this situation.
What to Do if You Can’t Make Your Car Payments
If you’re unable to make your car payments, you can take one of the following courses of action:
- Get in Touch with the Lender: One of the first things you should do is get in touch with your lender and notify them of the situation. They may be able to work with you while you get yourself into a better financial position.
- Refinance Your Loan: Loan refinancing is a viable option if you’ve been making payments on time and your credit score is good. Refinancing can help lower payments by either extending the loan term or lowering the interest rate. Your original lender may offer refinancing services. If not, you can look elsewhere.
- Sell Your Vehicle: Depending on how much you still owe on the loan and the value of the car, you may be able to sell it and use the profit to pay off the loan.
- Trade-In Your Car: While you may not get as much as you would if you sold it as a private seller, trading in your vehicle is another way to lower your payments. You can estimate your car’s trade-in value online.
- Find Someone to Take Over the Loan: Not all lenders allow this option, but if yours does, you can find someone who’s willing to take over your loan. If your loan has a low interest rate, you’ll probably have an easier time doing this.
- Repossession: This isn’t an ideal option. Allowing your vehicle to be repossessed will negatively affect your credit score, and you may also be charged for the costs of repossessing and selling the vehicle. These costs will be added to your outstanding loan balance.
- Bankruptcy: Bankruptcy can, in most cases, eliminate a repossession balance or help prevent a car from being repossessed.
Get More Car Financing Advice at Mercedes-Benz of Escondido
Do you have additional questions about auto financing and how to navigate each stage of your car loan? Contact us at Mercedes-Benz of Escondido or visit us near San Diego and Escondido. Our knowledgeable finance team can answer your finance-related questions, such as, “What is a simple interest loan,” or “What credit score is needed to finance a car?”