When you bought your car, it probably seemed like your payments would be manageable. Why would you sign a contract on a vehicle that you didn't think you could afford? However, situations change.
Maybe you've lost your job, new expenses have come up, or perhaps you simply miscalculated your actual living expenses. Whatever the case may be, you can't afford your current arrangement, and you need help.
Options to Eliminate High Monthly Payments
Whether you want to keep your current car and just fix your payment situation, or if you would rather get rid of the vehicle entirely in favor something more affordable, there is an attainable solution. The important thing is to do something before you get behind on your payments. If you wait, you could do serious harm to your credit, and possibly face repossession.
- Contact your finance company. Believe it or not, your creditor will probably want to help you work out a solution to your payment issues. First of all, they want to keep you as a customer. Secondly, repossessing your car will not be advantageous to them. Repossession typically costs a financier about $8,000, and this is an expense that they would like to avoid.
The most realistic thing that your lender may be able to do for you is extend the life of your loan. This will lower your monthly payments. Granted, paying longer on your vehicle will probably result in paying more in the long run, but you will get to keep the car.
- Go back to the dealer. Specifically, contact the finance manager at the dealership. If you explain your situation, and express your desire to stick with this particular brand, they may be willing to let you trade your car in for a less expensive model. If the dealer feels that working with you will solidify your brand loyalty, this trade-down will be at least somewhat advantageous for them.
You will have to roll your current loan into a new one, but the combination of your trade-in and the new car's cheaper price tag should still yield more affordable monthly payments.
- Sell the car. This probably won't be the easiest route to take. You will have to advertise that the vehicle is for sale and field phone calls from potential buyers. However, if you can sell the car for what you still owe on the loan, you can start over from scratch with a less expensive vehicle.
- Find someone who wants to assume your payments. If this option is, in fact, a possibility, it could give another buyer a chance to own an almost-new car while avoiding many of the initial fees. However, not every lending institution will allow loan assumption, so check with your lender before advertising for an assumer.
Also, anyone who assumes a loan from someone else must be deemed creditworthy, so try to make this clear when you're scouting for a potential candidate. And just like with selling the car, this arrangement will leave you sans a vehicle, so you will probably end up at least temporarily driving something that may not be your dream car.
Need to Buy an Affordable Car?
If you've recently crawled out from under an overly expensive car payment, and you need a reliable vehicle that you can actually afford, Auto Credit Express can help. Even if your credit is less than perfect, we can find a dealer who can provide a loan solution that will work for you. Need more help with credit repair? Click here to get in contact with a reputable company that can offer support and advice.
Just fill out our fast and secure online application to get started today.