If you have lost your job, you probably have a lot on your mind. And one of the things that may be troubling you is the fact that you have a monthly car payment, and you're not sure how you are going to keep up with this obligation. Before you throw in the towel and resign yourself to repossession, consider trying out a few potentially helpful strategies.
Communicating with Your Lender
Believe it or not, your lender wants to keep you as a customer, and they may be willing to work with you if you are upfront about your situation. Call them as soon as you realize that you (temporarily) won't be able to make your current payments.
- You may be able to arrange a deferment. If you have kept up with your payments until now, your lender may defer your next payment for 30 days, or possibly even for 2 months. This will give you time to either get your unemployment income set up or (hopefully) find another job.
- You could have your loan restructured. Even if you're not eligible to refinance the loan, the lender might extend the length of the loan in order to lower the monthly payments. This way, if you find yourself having to live for a little while with the significantly reduced income that comes with drawing unemployment benefits, you will have a better chance of making your payments.
Other Ways to Avoid Repossession
If your car is repossessed, you could end up being obligated to pay the difference between what the vehicle sells for at auction (plus additional expenses incurred by the lender), and the amount that you still owe on the loan, and this can be a significant sum. Repossession also causes substantial damage to your credit rating. If you can no longer keep the car, try to find a new owner.
- You may be able to just sell the vehicle. This will only be possible if you have enough equity in the car (if you owe less than the car's current value). And depending on how much you are able to get for the vehicle, you may be able to buy a cheap car from a private seller that will get you through your jobless period.
- You could get someone to take over payments. This may be your only option if you have accrued negative equity (you owe more on your auto loan than the vehicle is currently worth). Given the circumstance, the ideal candidate for payment assumption will probably be a friend or family member. And if someone agrees to this arrangement, you will simply transfer the title over to this person.
Getting Back On Track
If you are currently recovering from being unemployed, and you need a car to get you to and from your new job, Auto Credit Express can help you get affordable auto financing. Even if your credit isn't in the best shape, we can find a solution that works for you.
Just fill out our fast and secure online application to get started today.