When you bought that brand new car eight months ago, everything was going great. The job was going well and, in general, things were on the up and up. But recently, things haven't been so great on the job front. Your employer has been cutting back your hours, and now you're not working as much as you used to. Now you are struggling to keep up your payments.
It's easy to simply throw up your hands and give up when you have financial problems. But before you resign yourself to the idea that you will have to stop making payments on the loan, there are some options to consider that can help you.
Talk to Your Lender
Communication is your friend. The worst thing you can do in this type of situation is not talk to your lender. What you need to do is call them and explain your situation. They will see that you are attempting to work with them in fixing the problem, as opposed to adding to it. Most lenders have options available besides turning in your car, such as payment deferment, where you will be excused from making payments for a couple months. Then, they will add on these payments to the end of the loan term.
This may just give you the time you need to get back up to speed financially. So, speak with your lender to find out what they can do.
Is Refinancing an Option?
If you need a solution that will take more time than the one listed above, perhaps you should consider refinancing your auto loan into a longer loan term. If you choose this option, we strongly recommend that once your situation improves, you get back into a shorter loan term. While you will be paying less per month, you will be paying more in interest charges in the long run.
A Less Expensive Car
If neither of the above are options for you, perhaps you should consider a more affordable used car. If you made a substantial down payment on your current vehicle, it is possible that you have some positive trade equity in it. And the remaining value can go towards the down payment on a cheaper used vehicle.
If you owe more on your loan than the car is worth, then you will either need to pay that remaining amount off, or you could possibly roll it over into the new loan if the dealer allows it.
Don't Give Up
If you are in a situation where you need a cheaper car, we can help. Our team is dedicated to finding you the best deal possible, fast. Just get started by filling out the online application today!