It can feel like all hope is lost if you fall behind on your car payments (or are about to). If you find yourself in this situation, the worst thing you can do is nothing. There are many possible solutions and you need to take action as soon as possible.

Contact Your Lender as Soon as You Know

The worst thing you can do if you fall behind on your car loan is resign yourself to the fact that your car is going to be repossessed. Nobody wins when a vehicle is taken back. It's far better if you try to work with your lender to come up with a solution.

You need to get in touch with your lender as soon as possible and be honest about your situation. The sooner you're able to talk to them, the more you can limit the damage that can be done to your credit and finances. Acting fast should also mean that more options are available to you.

There are several avenues you can explore with your lender. Here are some of the options to look into:

Get Current on Your Payments

If you missed a payment (or multiple ones) by oversight or due to a temporary setback, you should prioritize getting caught up. You can still speak to your lender and ask about late fees, but getting current should stop the situation from becoming more serious.

Ask for a Deferral or Due Date Change

looking at finances, budgetTalk to your lender about their deferment policy. Many lenders offer short deferment periods that you can use to get your finances in order. Ask for a 30-day deferral, or longer if you need it, to get back on track for the long haul.

Some lenders also offer forbearance, a fancy word for a temporary payment pause. Others will let you make reduced payments for a period of time until your financial situation is righted.

Typically, any skipped payments will be added to the end of the loan. Usually, this means interest still adds up during the down period. However, deferment and forbearance offer quick fixes for those dealing with temporary financial trouble.

You can also ask to change the date of your payment. If you can adjust your payment schedule so it's more convenient, this can help you avoid being late.

Be warned that there could be fees involved with adjusting your payment plan. Make sure to discuss all of this with your lender and to get any changes in writing.


If possible, see if you can refinance the loan. This can allow you to:

  • Extend the loan term - If you do this, you'll reduce the amount of your monthly payment. However, this will also result in additional interest charges over the loan term.
  • Get a lower interest rate - If your credit has noticeably improved since you've taken out the loan, it's possible that refinancing might result in a lower interest rate. In this scenario, refinancing could lower your monthly payment even if you don’t extend the term.

Sell or Trade Your Vehicle In

You may need to re-evaluate your budget and car choice if your financial situation has changed permanently. If you find you can no longer afford your vehicle, consider trading it in for something more affordable. If you have equity in it, you could even sell it and pay off the loan.

The Bottom Line

Most people need their car to go about their everyday lives. Just remember that the worst thing you can do if you're about to fall behind on your car payment is nothing. Take action by calling your lender and talking to them to figure out a solution.

If you're in the market for a car, you don't need to let your credit issues slow you down. At Auto Credit Express, we connect car buyers to local dealerships that specialize in working with unique credit situations. Our service is free and doesn't put you under any obligation, so you can get started with confidence by submitting our auto loan request form today.