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From the Experts at

What to Do if You Can’t Afford Your Car Payment

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A woman sits in a parked car with a cellphone in her right hand and her left hand on the steering wheel.

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Whether you’ve experienced sudden financial stress due to an emergency such as the coronavirus pandemic or you find yourself struggling with your debt, you might have trouble making your car payment each month. And that makes sense. According to the Quicken, transportation costs, including your car payment and fuel, make up the second-most expensive budget item for the average household. So, what should you do if you can’t afford your car payment?

There are actions you can take, though some have some pretty hefty consequences and you’ll have to decide what works best for your situation. Here are eight common methods people use when they can’t afford their car payments.

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    8 Methods

    1. Modify your auto loan
    2. Refinance your vehicle loan
    3. Trade in your car
    4. Let someone assume your loan
    5. Sell your vehicle
    6. Turn the keys in
    7. Let your car be repossessed
    8. File for bankruptcy

    1. Modify Your Auto Loan

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    If you’re struggling financially and think you might not be able to pay your car payment, call your lender as soon as possible. Simply state that you’re having some financial difficulties and ask if they have any relief programs.

    Some banks are willing to offer temporary forbearance or loan extensions, which means your payments are paused for a month or more without any penalties. Many auto lenders offer a one-time forbearance for a single month for almost any reason as a courtesy to people who have always paid on time, and some have a provision that lets you use this option once a year. Just remember that those payments don’t go away—they get tacked on to the end of your loan and you may end up paying more in interest overall.

    If you’re experiencing COVID-19-related financial problems, the federal CARES Act doesn’t include specific relief related to car payments. But the government has encouraged private lenders to work with consumers as much as possible, and many are offering some relief programs related to the pandemic.

    2. Refinance Your Vehicle Loan

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    If you have strong credit but are experiencing a temporary difficulty paying, you may be able to refinance your loan and lower your payments. You can do so by lengthening the terms on your loan or getting a decreased interest rate. Consider the examples below to see how this might work.

    Imagine you bought a car for $20,000 two years ago. You took out a loan for five years at 5.5% interest. Your monthly payments are $382.02 and you owe roughly $12,600 after making two years of payments.

    If you refinance at the same interest rate but for a term of five more years, your monthly payment would be $241. The downside is that now you’re on the hook for a car payment for a total of seven years.

    If your credit has improved and you can get a lower interest rate, you can save even more. Refinancing $12,600 for four years at 5% interest means a payment of around $290. The same rate for five years makes for a monthly payment of only $238.

    3. Trade in Your Car

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    Consider trading your car in for one that’s less expensive. Trade-ins are often less than what you could receive from a private-party sale.  To get the most from your trade in, appraise your car’s trade-in value, get a dealership quote and then negotiate for a fair price. If your credit has improved, you can also trade the vehicle in for a new car with better loan terms. This tip usually works best if you’re not upside down on your car—which means that it’s worth at least what you owe on it.

    4. Let Someone Assume Your Loan

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    If you have a good car loan with a low-interest rate, or even a good lease, a buyer may be willing to take over your payments. Talk with your lender—not all car loans and leases are assumable. If yours is, the buyer will likely have to meet credit and income qualifications to officially take over the loan or lease.

    5. Sell Your Vehicle

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    Another option is to advertise your vehicle for sale and see if you can sell it for enough to pay off your loan. If not, you will have to come up with the difference between what you sell the car for and what you owe.

    Selling your vehicle is an option if you don’t need access to a vehicle to make it in daily life right now. For example, if you can use public transportation or have a second vehicle to use, this can help you get ahead financially.

    6. Turn the Keys In

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    Sometimes, walking away from your vehicle is the only available option. This is known as voluntary repossession or voluntary surrender. This should be a last-resort option if you can’t afford your car payment anymore. That’s because it comes with some pretty stiff consequences.

    Handing the keys over voluntarily keeps you from being visited by a repo person, which can be embarrassing or stressful. But it doesn’t necessarily mean the lender won’t try to collect money from you. In most states, lenders can attempt to collect the difference between what you owe and what the car sells for after a voluntary repossession. The surrender will also show up as a negative item on your credit report.

    How do you return a car you can’t afford? Not to the dealership. Contact your lender and let them know you can’t afford the payments and want to voluntarily surrender. Your lender can let you know what the process is and arrange a time and location where you can hand over the keys and the car.

    7. Let Your Car Be Repossessed

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    You can also wait until the bank figures out you’re not going to pay or you become so delinquent that the lender moves to repossess your car. If you do this, the bank might charge repo costs to you and try to collect them, though. Repossession also shows up on your credit report as a negative mark—and it’s a pretty bad one. It can make future lenders wary of working with you because your history indicates you are someone who won’t pay their debts.

    8. File for Bankruptcy

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    Filing for bankruptcy causes an automatic stay. That means creditors cannot continue to seek payment from you or repossess your car while the bankruptcy is in process. Chances are, if you can’t afford your car payments, you might be dealing with other financial issues. Bankruptcy options can offer some help to work through those issues and rebuild your financial life.

    However, bankruptcy has serious consequences on your credit and can limit what you’re able to do with your money in the near future. Make sure to talk to a bankruptcy attorney about your options before you make a choice to file.

    Keep Track of Your Credit

    Whatever you decide, it’s important to stay informed about how the decision impacts your credit. Sign up for the free Credit Report Card so you can keep an eye on your score and five factors that impact it.

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      • Carol

        How can I get in touch with a Bankruptcy attorney

        • Gerri Detweiler

          You can search online or you may want to search the directory at the National Association of Consumer Bankruptcy Attorneys website.

      • Gerri Detweiler

        Talk with a consumer bankruptcy attorney. If you own the cars outright it could be a problem because they may be an asset that is available to other creditors. If you still owe money on them, however, then you may be able to continue your payments and keep the cars. Again, you’ll want to get advice from a bankruptcy attorney as exemptions vary by state.

      • K williams

        what happen if i filed bk7 and did a reffirming with my car loan . however they still repo the car 2 weeks after the discharge for non payment. but the trustee did not officially sign-off on the documents until 2 months later.

        • Gerri Detweiler

          This is a question for your bankruptcy attorney. Have you spoken with him or her?

      • Jessica

        Hi . My car taking away the bank has the car. I don’t want to do because I can’t afford the car payment and take car back.I don’t know what my next step

        • Gerri Detweiler

          Jessica – Please talk with a consumer bankruptcy attorney who can look at the situation for you and make suggestions (which may or may not include filing).

      • Jan

        My son is a 100% disabled military veteran and has a monthly income of about $3800. He made some poor decisions in the past when buying vehicles and became seriously upside down. This caused higher payments, and he began having difficulty making ends meet.

        More poor decisions followed when he used credit cards and bank loans to provide the cash needed in order to make the payments and still have money for living expenses. About 6 months ago, he received a flyer from a local dealership which guaranteed to get folks into a new vehicle with lower payments than currently paying. He went in thinking this would solve his cash flow problem. Instead, the dealership reported his income to the lender as $6500 per month, which actually raised his payment, putting him even further in debt.

        I have taken over control of his finances And have him on a strict budget in order to reduce his debts. My question to you is what responsibility would this dealership have to right the wrong they committed when they lied about his income? With compromised mental health, was my son taken advantage of?

        Thank you in advance for any guidance you can provide.

        • Gerri Detweiler

          Jan – I am so sorry to hear what you and your son have gone through. My first question is whether, with all this debt, he should consider bankruptcy. It may allow him to put these bills behind him and get a fresh start. If nothing else, you may want to meet with a consumer bankruptcy attorney simply to find out what his rights are with regard to the falsified income. If you would consider talking with one, you can visit the website of the National Association of Consumer Advocates. Another option is to file a complaint with the Office of Servicemember Affairs within the CFPB along with your state attorney general.

      • Jaime

        I am financing a car and recently got into a car accident which totaled the car and my car insurance will not cover to replace or repair the car. What will happen if I stop paying for the car? If they repossess the car I don’t know if they would be able to sell the car at an auction because it is totaled.

        • Credit Experts

          Why will your insurance not cover the damage? (Most finance companies require that a vehicle be insured to protect their collateral.) If you stop paying for the car, it could be repossessed, yes, and you could also be sued for the difference in what it sells for at auction and the amount you still owe. (And if you lose, you could get a judgment against you and then wage garnishment to pay the judgment.) Depending on the rest of your financial situation, you might want to talk with a bankruptcy attorney about your options.

        • Charmaine

          Hi Jaime. I’m in the same exact situation! How did you handle yours or what was the outcome??

      • Jaznelly Rodriguez

        I brought my car a year ago and I’ve been having problems with the vehicle ever since I brought it. I always make my payments on time but I can’t deal with it anyone its not self for me and children. And Yes I took it in many times to get fix and the problem remains . What should I do ? I don’t want to mess up my credit 🙁

        • Credit Experts

          Jaznelly —
          Was this a new car? If so, lemon laws may help. (See: Are You Driving a Lemon?). If not, does the dealer or your mechanic have any sort of warranty on the work done on your car? Sometimes, unfortunately, the best solution may be to sell or trade it if it appears it won’t be reliable and you have no other recourse.

          • Jaznelly Rodriguez

            it is a used vehicle

            • Credit Experts

              That makes it a lot harder. Simply not paying will definitely hurt your credit. Trading it in might be your best option. Have you investigated that at all?

              • Jaznelly Rodriguez

                i just feel like this company charges way to much. I always pay on time. I just don’t want the car any more. It has to many problems and my kids safety is more important to me.

              • Credit Experts

                It sounds like selling or trading are your best options. Stopping paying because you feel you are being overcharged could result in a repo and your being sued for the difference between what you owe and what the car sells for at auction. And it would badly hurt your credit score. If you can get out of the car you believe is dangerous and into one that is safe without sacrificing your credit, that is your best option.

      • bebang

        hi! me and my husband bought a car last NOVEmber 2104 but im paying for it. Im planning to leave the country and my husband doesnt want to keep the car anymore and just let me decide what to do with it. whats the best way to do with the car?

        • Credit Experts

          Can you sell it? (If it was a used car, you may be able to get somewhere close to what you paid.)

      • Robin Jestice Robinson

        I just got a brand new car through finance company but lost my job, but still have on going SSI, Which was included as part if my income…my credit is poor to average so refinancing is out of the question I would think…what do I do ??
        How long will it be before they repossess with partial payments or no payments?

        • Gerri Detweiler

          Robin – I am so sorry to hear about your job loss. How long it will take them to repossess the vehicle depends on state laws. Why don’t you talk with a consumer bankruptcy attorney? It may be possible for you to hold on to your vehicle while you try to find work, and if not the attorney can help you minimize the financial fall out.

      • Ronnie

        My car had been in repossession status, but they never picked it up. Now it’s charged off on my report. My car has recently been in an accident..will my insurance cover my car?

        • Gerri Detweiler

          I have no idea. I’ve never heard of this before. Can you let us know what you find out from your insurer?

      • Stan

        I have an RV that I am selling and have discovered the principal balance owed is over $10,000 more than my amortization table says it should be. I was granted three skipped payments in the first three years, but have paid over the amount owed in the last 5 years. When I deduct the late charges paid, and the interest charges for the skipped payments, I come up with the exact difference in over payment of interest, $10,000 and change. Example, My most recent interest charged on my bill, is the amount shown on the amortization table that should have been charged 29 months prior! Can a bank over deduct interest charges on a auto loan. This loan is over 8 years into the 15 year loan and I have paid over $76,000 towards the total loan interest charge of $92,000 at maturity! What can I do?

        • Gerri Detweiler

          It’s possible there is a mistake? Have you contacted the lender? I’d suggest you start there but if you don’t get a satisfactory answer the next step would be to either talk with a consumer law attorney or to file a complaint with the CFPB.

      • zack

        I have a car loan and they are not reporting it it doesn’t show up on my credit or my wifes if i let it get repossessed Will it hurt my credit even though they dont report it

        • Gerri Detweiler

          Just because it’s not reporting now doesn’t mean it won’t ever. Some creditors only report accounts when they go delinquent. Or if the balance is sent to collections the balance may be reported by a collection agency. However, my biggest concern is that you are thinking of just letting them repo it. If you do, you could still wind up with a big bill as they may try to collect the deficiency. I’d urge you to at least talk with a consumer bankruptcy attorney to understand your options and possible repercussions.

      • Deb

        I used to lease my car but I’m now financing a new car. My payments are a little higher so I’ve been making my monthly payments in installments. I live in New York so I have a grace period of 10 days before I incur a late payment. The financing company has advised me to pay my car note in full and not installments because that they say that it can mess my credit up. Is this true?

        • Gerri Detweiler

          I’m sorry but I truly don’t understand the scenario you’re describing. Can you be a little more specific?

      • Carlino King Iz

        I have 2 car loans one a 2011 that I just acquired in February and one 2008 that is from 2013 the one from 2013 just got repossessed should I get it back ..its kinda crappy now..or let it stay repossessed and get a newer model my 2011 car note is up to date

        • Credit Experts

          Carlino —
          We can’t make such decisions for you. We can tell you that letting it stay repossessed will not necessarily relieve you of financial responsibility for it. You are likely to have to pay the difference in what the car sells for plus repo expenses (storage, legal), at the very least. A repo also severely damages your credit and will make it more difficult (and expensive) to finance another car.

      • Daiquan Frasier

        I went in to co-sign my girlfriends car and ended up actually being the owner and she being the co-signer. We broke up and she ended up totaling the car in a car accident and I can’t afford the payments at all.. What should I do?

        • Credit Experts

          Daiquan —
          Whether you were the primary owner or co-signer doesn’t make any difference when it comes to financial responsibility. Did you have insurance on the car? That might provide some money for payments. Sadly, you are not alone in finding out about the financial responsibility co-signing involves through experience. You can read more about co-signing here: How Co-Signing Can Affect More Than Just Your Credit Score

      • Gerri Detweiler

        Please talk with a consumer bankruptcy attorney asap. you need to a. find out how repossession works in your state and b. consider whether you need to file bankruptcy if you aren’t able to find a suitable job quickly. Doing so may help you keep the car while you get back on your feet.

      • Daiquan Frasier

        Well she took off collision and left only the liability. The last payment she made on the car was back in August of 2014. I’m scared that they will begin garnishing my check soon if this isn’t taking care of soon. What are my best options here please?!

        • Credit Experts

          Have you spoken with a bankruptcy attorney or a credit counselor? They won’t garnish your check unless and until there is a court order. So very sorry this is happening to you.

      • Larry

        I have an auto lease and the payments are too high; ($750.00) if I turn the vehicle in to the dealer what will happen. What are my options if any I have only been in this lease for three months

        • Gerri Detweiler

          We have written an article on that topic, and although it’s about a car loan the same principles apply: .Can I Return My Car to the Dealer?

          An alternative might be to try to find someone to take over your lease through a site like Swap a Lease or Lease Trader…

      • Credit Experts

        You should, but it will also be less any expenses (repossession, listing, selling expenses, etc.)

      • Credit Experts

        Sid — Indeed you can refinance a car loan. We wrote about it here:Can You Refinance a Car?

      • Chad

        I bought a new car last week, on Monday my wife was notified her hours will be drastically cut. With this news we will not be able to afford the car note. Do I have any options?

        • Credit Experts

          Chad —
          Read your contract very carefully — particularly the fine print. If there is a chance that this reduction in hours would result in the loan not being approved, it’s possible that it will be. That’s not great news for most people who think they have bought a car, but it could be useful to you. You can read more about that here:
          Help! I Just Bought a Car & Then Was Denied for the Loan

          Good luck to you.

      • dott

        I had to retire in march due to illness . right now receiving social security but it it little amount. having hard time paying car payment of 402.62 and finance company will not refinance. what is best avenue to go?

        • Credit Experts

          Dott —
          That sounds like a difficult situation. Do you still need the car? If you sold it, could you pay off your loan and perhaps buy a less expensive car? It’s also possible to refinance with a completely different financial institution. You can read more about that here: Can You Refinance a Car?

      • worried

        if i let it go back by turning in the keys what is the differents that i owe is it the amount that i bought the car for or the whole loan full term

        • Gerri Detweiler

          It is the total balance owed, plus allowable costs associated with taking the car back and selling it, minus the proceeds from selling the vehicle.

      • Irie

        My fiancé got a car loan without having a job and the person at the car dealer knew he was going to have to pull some strings to get her the loan is that legal?

        • Gerri Detweiler

          Did the finance guy falsify documents? I don’t know exactly what you mean by pulled some strings…

          • Irie

            I believe he may have falsified documents

            • Gerri Detweiler

              My advice is to talk with a consumer law attorney to find out what your options are.

      • Jc

        Will claiming bankruptcy stop the repo of my car and if I keep the car through the bankruptcy can I start fresh with car payments?

        • Gerri Detweiler

          Yes bankruptcy may stop the repo of your car, and you may be able to make more affordable payments. But to find out specifics about your situation, you’ll need to talk with a consumer bankruptcy attorney.

          • Jim Buchan

            if 99.9% = “may stop” BK laws are the macdaddy law of the land and it will halt everything. of course BK is different these days, the days of chap 7 erasing everything are gone. If you have a job= you will pay something for 5 years. BK SHOULD BE THE LAST RESORT BUT IF you must dont fear it.

      • Jorge

        If I let them repossess my car do I still owe the balance on the car or no

        • Gerri Detweiler

          In most cases, yes. If the car is sold for less than what’s owed (plus legally allowable repo costs) they can try to collect the deficiency.

      • DC Wilson

        I purchased a car in 2013 – I was able to make the payment. I cant now due to the new responsibility of taking car of a sick elderly parent. I have sent letters to the financial company and they have been ignored. Even called to discuss and was told someone would call me back and no one has – made three attempts. I am between a rock and a hard place – I cant afford the car without negatively effecting the care financially of my parent – help please – I have had GREAT credit for over 40 years too.

        • Gerri Detweiler

          I can’t imagine how stressful this is for you. Start calling again–don’t rely on letters. Ask to speak to a supervisor. Be polite but persistent. In the end, though, they aren’t obligated to modify the terms of the loan so you may want to also talk with a consumer bankruptcy attorney so you can find out what your options are if they won’t work you. (It may be possible for the attorney to negotiate on your behalf as well.)

      • Xtinaaaaa

        I recently got in a car accident the car is totaled doesn’t work and not worth taking back at the time I didn’t have money to pay my insurance so guess what crashed without insurance. I don’t know what to do now with my car payments and I deffinatly don’t want bad credit now I have to pay my medical bills from hospital and the other vehicle involved in the accident car bills for damages since I’m at fault. How can prevent bad credit I would continue paying the car till it’s pay off but now my bills have pulled up with this accident what can I do help!?

        • Gerri Detweiler

          Unfortunately this may be a situation where you just can’t do everything you want to do. You need to get advice from someone who can go over the entire situation with you and figure out what you can afford to do. I’d encourage you to talk with a consumer bankruptcy attorney to discuss your options.

      • Maria Contreras

        I bought my car from a buy here pay here… Unfortunately, the company owner died and his widow turn my account to US Auto Credit. How can I voluntary repossess my car ?

        • Credit Experts

          Maria —
          As the story above says, voluntary repossession is not usually a good way to go. You will still owe for the difference between what they car sells for and what you owe, after expenses. So you may well still have a debt and not have a car. It would be better if you could work out financing. Or, if you can sell the car, that might be preferable.

      • Leo S.

        I bought a Mini Cooper and I’ve had it for 2 years now at a payment rate of
        $350 a month, with a down payment of $3,000. Since the purchase, I have
        invested in a new Transmission for $5,000, Tires $800 and a Windshield for
        $300. I have fallen behind due to lack of work and it’s my first 30+ days late on
        the vehicle. Do I have any rights? I have called the creditor and all they can tell me is that “These were all my responsibility” and that they could do nothing for me.

        Do I have any laws or any rights left? I truly feel that I was doing right by the
        creditor by getting it fixed and continuing my payments and getting the car fixed.
        I could have easily turned around and walked away from it all but I didn’t because
        I truly wanted to fix my credit.

        Thank you in advanced for the reply’s any advice would be a good help.
        I’m in California.

        • Gerri Detweiler

          I am not aware of any law that gives you leeway on the loan because you fixed the car. California does have a strong lemon law, though, and perhaps you have some recourse under that law. You’ll need to talk with a consumer law attorney in California familiar with the lemon law. You should be able to get a free consultation.

      • Dan T

        I have a brand new car I got in September 2014 and it’s a year 2015. Car payments 640.00! Went back to the dealership in California to refinance but was rejected due to bad credit. Is there any hope? I’m not behind but that’s where I’m headed. Can you help? What can I do?

        • Gerri Detweiler

          I would suggest two things: one is to talk the lender to see if they offer a hardship program that may help. If not, then contact a credit counseling agency to see whether they may have some ideas for you.

      • Rayshun D

        Are you able to obtain a car title that has been charged off?

        • Gerri Detweiler

          Are you asking whether you can get the title on your car when the debt was unpaid and charged off? It’s unlikely. The charge off doesn’t mean the debt isn’t still owed. It may still go to collections.

      • Carlos Luna

        I have had my car for 5 months my payment is 330 but I will soon be getting married and getting my own place. I have tried to advertise my car and have someone take over loan on my car and everyone is just trying to get a notarized agreement and keep the car under my name. I won’t be able to make my next payment. I filed a ch 7 BK last year and it was discharged successfully, should I look in to filing another one I don’t have the money to keep making my payments at 330. The car has check engine light on and needs full maintenance as well as a suspension issue. I am with Consumer Portfolio Services they are the finance company.
        Thank you!

        • Gerri Detweiler

          Please don’t let someone take over your car payment without the lender’s involvement and a formal assumption. That’s incredibly risky. You’ll still be the legal owner of the car and if there are tickets or accidents, you could be on the hook.

          Because your bankruptcy was so recent I am not sure you will be eligible to discharge this debt, but please reach out to your attorney for advice. He or she is familiar with your financial situation and will hopefully have some suggestions for you.

      • Kristina

        If my car is up for repossession but not taken and I am able to pay the amount owed will they still take my car?

        • Credit Experts

          Call to check. If you were up to date on payments it would be hard to understand why anyone would take your car (or have a right to).

      • carla


        I just purchased a car November 2014. The monthly payments are getting to be too high ($600). What is the best thing to do? Ideally I’d like to sell, but I do have a loan out for the car and still owe money on it. the pay-off amount is somewhere around $35,000. Will I just need to sell it to someone for more than that? And what if they finance it, is that okay? I also have yet to miss a payment and am always on-time with payment

        • Gerri Detweiler

          If you can sell it for enough money to pay off your loan, that’s ideal. (If your buyer can get used car financing then they can use loan proceeds to pay off the loan.) If you can’t, then you’ll have to decide if you can come up with the difference out of your own pocket or try some of the other options listed.

        • David

          I have a truck payment going on bit i got 4 credit cards that i can pay its eigther my truck payment or the credit cards if i stop pauing the cards would i have any chance ofe loosing the truck even tho i make my payments on time

          • Gerri Detweiler

            Your truck is a secured loan. If you want to keep the truck, you’ll want to make those payments on time. We wrote about your other question here: Can Debt Collectors Repossess My Car?

      • Ben

        Hello I’m in a real difficult situation, I have a car loan for a car that has been in an accident and I had insurance with a terrible company. Now the car has ceased to work now my co-signer and I are trapped. I fixed the vehicle as much as I could but the lender didn’t want the car back and I tried to trade it in but was unsuccessful. I’ve fallen 2 payments behind due to paying for taxi’s and public transportation. I tried to make partial payments but they threatened to garnish the wages of my co-signer and I. What can we do to keep our credit in good standing since the car has become a pain in both our sides?

        • Gerri Detweiler

          Ben – I wish I had an answer for you but unless you can catch up and/or pay off the car loan both of you risk further credit damage. You could consider bankruptcy if this is truly too much but then the entire burden will fall on your co-borrower.

      • shanice

        I barely got my car 5 months ago and literally every month there’s something wrong with it and I can’t keep up with it every 2 weeks, I just want to know the best option and route to go on?

        • Credit Experts

          Shanice —
          If it is a new car, lemon laws may offer some protection. If the car was used, you have a trickier problem. One way to deal with it would be to sell the car, hopefully at least for as much as you owe.

          • Shanice

            It’s a 2007 Ford Fusion and I’ve only had it for 5 months how would I go about that even if it’s a $1500 fix?

            • Credit Experts

              That is a tough problem — and it is one of the risks you take when you buy a used car without a warranty. If you can fix it and sell it for what you owe on the car, plus the fix, that is ideal, but it sounds as if that’s not realistic for you.

      • Credit Experts

        Certainly you could try to sell the jeep. If it’s possible to recover what you owe, that’s ideal. But even if it’s not, you may do the math and decide it’s worth it if insurance and maintenance costs drop enough to help you budget. (And you can’t discount the value of feeling less stress.)

      • Minerva

        I recently got a car out the dealer about 3 months ago and I recently lost my job so I can’t make the payments they are too high , any suggestions!??

        • Gerri Detweiler

          Minerva – Sorry to hear that. It has to be incredibly stressful for you. I would like to give you a simple answer but unfortunately there isn’t always one. We tried to outline options in the story above. My suggestion is you talk with the lender and at least meet with a consumer bankruptcy attorney so you understand your rights and responsibilities if you have to give the car back.

      • tyga kat1

        My car loan is $400 a month, but I have a baby on the way, newly married and my bills severely exceed my income. I’ve been sending $50 a month. Can the loan company still repo my car even though I’m making some form of payment every month?

        • Gerri Detweiler

          Yes. Making a smaller payment does not protect you from having the vehicle repossessed. It sounds like a consultation with a consumer bankruptcy attorney would be a logical next step for you.

      • Releigh

        In an attempt to not destroy my credit, I’m considering taking out a personal loan to pay off an auto loan with high payments for which I’m a co-buyer. The other buyer is out of the picture and unresponsive, so refinancing under just my name is not an option. If I’m approved for the loan, I will pay off the truck, and sell i, then use the funds to pay back the personal loan. Wondering if taking this route truly makes sense?

        • Gerri Detweiler

          My only question is whether you can get clear title even if you pay it off. If the other person is on the title they may not be willing to relinquish their share and you may be essentially handing them a free and clear car to drive. I’d suggest you consult a consumer protection attorney before you go this route. Let us know what happens–it sounds like a mess.

      • Jessie

        I’m in a financial struggle. I bought my car last August, making my first payment last September. Do you think I would possibly be able to skip a payment?

        • Credit Experts

          Only if your lender agreed to it (which is unlikely). Otherwise, the late payment will be reported to the credit bureaus, and it could cascade into many late payments unless you were able to “catch up” with a double payment. Better would be to find a way to make that payment. Late payments can have a big, negative effect on your credit. For more, see: How Much Will One Late Payment Hurt Your Credit Scores?

      • Isack Pintor Estrada

        I have a car loan and my dad is my co-signer but i cant make the payments anymore, how bad will it hurt my dad’s credit if i let them repossessed the vehicle? (He has good credit)

        • Credit Experts

          Isack —
          It will badly hurt his credit. What are your alternatives? Can you sell the vehicle for anything close to what you owe? Please discuss the situation with your dad. Even a late payment will hurt his good credit, and a repossession will hurt it even more. You can read more about what a single late payment can do to bad credit here: How Much Will One Late Payment Hurt Your Credit Scores?

          Hopefully, your father understood the risks of co-signing. But inability to pay can strain family relationships (but so can hiding things, so the sooner you discuss this and come up with a plan together, the better.) Good luck to you.

      • LILY

        So I got into a car accident and my car loan isn’t pay off yet. Also I didn’t have insurance for the car. Would I get arrested? I stopped paying the car loan for three months due to loss of job too.

        • Credit Experts

          Lily —
          It is against the law to drive without insurance in all 50 states. But state laws govern exactly what happens. You could be ordered to pay a fine, not be allowed to register your car, or even lose your driver’s license. It really depends on state law. We are not lawyers, and you may want to talk with one. (You may be able to find one through a local legal aid society.)

          • Daniel

            It is not again the law in ALL 50 states.. For instance you do not need insurance in the state of New Hampshire, however the banks do require you to have insurance. If you don’t make your car payment or let your insurance laps you can get your car reposed

            • Credit Experts

              You are right. Thanks for catching that error and clarifying . . . in NH, you do have to be able to show you have funds to cover damages in an at-fault accident. And in general, a person who is making car payments is required by the lender to have insurance. Here’s the NJ explanation:


      • Anya Kolenchenko

        Hi, I got a car loan 3 month ago. It’s a very bad deal since the car’s true value is $10,000 but I’m supposed to pay $22,000. The monthly payments are $340 for 6 years. I recently have lost my job and now have no idea what to do. I need to get rid of the loan but selling the car will only cover half of my loan. Any advice on what I should do? Could filing for bankruptcy get me out of a car loan? Or at least get me out of paying $12,000 difference?

        • Credit Experts

          Why not talk with a bankruptcy attorney to find out? In many cases, an initial consultation is free.

      • Kris

        Can I do a voluntary repossession if my name is not on the loan?

        • Gerri Detweiler

          Not sure I understand…can you elaborate?

      • Eddy

        We bought a new car in February of 2015 but now I can’t make the payments on it.It now has a little over 19,000 miles can I return it and who should I talk to

        • Credit Experts

          Eddy —
          You almost certainly cannot return it. We had a similar question from a different reader and discuss some possible options here: Can I Get Someone to Take Over My Car Payments?

      • scored88

        i have a 06 trailblazer with 7000 left on the loan and now blown engine . no warranty left and 4000 to fix it that i dont have . im debating on walking away because i cant afford to buy a new used car and pay for a dead one at the same time .

        • Gerri Detweiler

          I am not sure what to tell you as there is no easy answer here. But keep in mind that if you walk away they may still try to collect the deficiency, and may sue you for even more than you owe now due to additional costs. If you have other debt, it may make sense to talk with a consumer bankruptcy attorney.

      • Brian C

        I purchased a car last week that is realistically too much car for my needs. I can make the monthly payment, I can even pay off the balance (which would take a large chunk of my savings.) Since the outstanding loan is financed, If I were to sell the car myself and make enough to payback my loan plus some, how will I be able to pay the finance company to obtain the title for the new owner? What if they don’t want to take over the loan and just pay me cash?

        • Credit Experts

          Are you sure it makes the most sense to sell? You may want to run the numbers to see. Often the most economical car for you to drive is the one parked in your driveway.
          But in answer to your question about the title, AutoTrader posted this on how to sell a car you still owe money on:

          • BrianC

            Probably not. Even if I sold to a private party, I will still most likely be out $1200. I owe 17,800 on the loan (this includes the extended warranty @$2500.00) My interest rate on the Cadillac is 2.1%, but I am going to transfer the loan to my credit union at a rate of 1.9%. Would it make sense to put down say $5000.00 more to lower the principle and shorten the term? The current term is 5 yrs. I won’t be keeping the car that long.

            • Gerri Detweiler

              If you find a buyer that makes an offer acceptable to you, then you can ask for a pay-off from the lender, and make up the difference from savings. I am not sure it’s worth depleting your savings now (since you have such a low interest rate) but if there is a risk you would spend the money and then be in a tight spot with the car, you could pay the balance down now.

      • John Talon

        In Sept. 2013, I financed a used vehicle (2010 Nissan Cube) with $350 down, 23% interest, $414 monthly payments for 72 months. Recently, I came into money held in a discretionary account that would allow me to payoff the car for $17,796 (the amount offered by the Loan Company). The actual amount owed currently is $15,964.18. $16,500 was the original amount financed. My instinct tells me to pay off the car while I can because I like the car, it runs well, and it is perfect for my needs at this time. Are there any other options that would save money? Voluntary surrender of vehicle maybe? But then I don’t have a car and I have to pay the balance of what the car gets at auction. Blue Book is $5000 trade / $7-8,000 sell. 2010s with similar mileage and same year sell for $10,000. I’m going to lose money anyway, but if I keep making payments, I will end up paying $29,000 over the life of the loan. That’s out. I’m getting pressure to fight with my loan company, but that doesn’t make sense to me. I’m the one with the bad credit, so I didn’t qualify for a better interest rate, but $350 was a down I could afford, and I needed a car badly, and the White Cube had 50,000 and new car smell as it was a fleet vehicle. I think I got a good deal, all things considered. I’m being hounded by back seat experts fixated on the 23% interest. I suppose I can simply say that if I keep making payments for the full 72 months I will have paid $29,808. If I pay $17,796.30 now when I can, I save $12011.30, I receive title on the vehicle, I don’t have to worry about car payments anymore, and if I sell the car myself for $10,000, I have will have spent $7,796.30 for two years use of an excellent car that gave me 20,000 miiles of driving, $3898.15 per year. A rental car for a year at $20 a day would cost about $7,200 per year. So I saved money there for sure, even if the rental was $14 a day, after insurance etc. make it $20 to keep the math simple. so yeah! pay off the damn car and don’t look back. what else is there that i can do? i don’t want to piss off a loan company i might have to borrow from again when gas prices go to $4.99 a gallon and force me to buy a Prius.
        Unfortunately, I’m being asked to complain about the 23% interest as if that’s going to change the payoff amount. or am I missing something?

        • Gerri Detweiler

          It sounds to me like you are thinking clearly about this. There is generally no cap on these rates so it is what it is. Like you I am not sure where complaining will get you. With that high interest rate, paying it off and freeing up cash you can then put toward savings and other goals seems to make sense.

          The only other scenario I can think of is to talk to a local bank or credit union and see whether they would finance a small balance at a low interest rate if you paid down the balance significantly. (It may possibly be a low risk loan for them and you will keep some cash free.

          Let’s see if anyone else weighs in here…

      • Samantha Smith

        Hi I got my new car back in April 2015 the loan was for 22, and some change. It’s a 2014 dodge dart sxt rallye. I am currently make 330 monthly payments and it drains my account everytime. I trying to find a way to get me out of my car loan without paying extra money. Because I don’t have extra money to spend. I know I could try and sell the car for what I owe but Noone is willing to pay that price every person I’ve had wants a stupied deal like $10,000 and I can’t come up with the other $10,000.

      • Jennifer Ramirez

        I’m having the same problem right now I am expecting and I have car payments to do, auto insurance & rent to pay which was raised up It is quite hard for me I’m at the point in which I just wish I never got the car and would have gotten something about 8,000 which I would pay quicker, Now I do not know what to do because this is stressing me out a lot knowing I have a baby on the way and so many bills to pay.

        • Gerri Detweiler

          I am so sorry to hear that Jennifer. And the stress when you are pregnant isn’t good! Have you thought about talking with a local credit counseling agency? They may have some ideas for you. I just wrote about that in this article: 6 Places to Get Free Help With Your Credit Problem

          • Jennifer Ramirez

            Yes it is stressful! I have not but I am trying to see if I can pass the car on to someone I know that can pay for it. Am I supposed to go to my bank to have them help me with this”?

            • Gerri Detweiler

              Yes, we wrote about that here: Can I Get Someone to Take Over My Car Payments?

              • Jennifer Ramirez

                What if there isn’t anyone that can take over the car and I can’t pay at all anymore what other option is there because I’m at the point where I literally can not make ends meet because of these car payments.

              • Gerri Detweiler

                They can, but we tried to share warnings about making sure you aren’t on the hook if there is an accident or the payments don’t get made. It isn’t a lease is it? And you can’t just sell it?

              • Jennifer Ramirez

                What is a lease I’m not sure I’m understanding right? No, no one that I know is willing to pay because they just don’t have the money and I’m not sure there is a website I can just put it into which I can sell ASAP.

              • Gerri Detweiler

                For drivers who have financed their cars, the only option is generally to sell the vehicle. For those who have leased their vehicles, sites like LeaseTrader and SwapALease help facilitate lease assumptions.

              • Jennifer Ramirez

                Oh ok I see I had to finance my car but it really didn’t make much of a difference. I never leased it.

      • Boss Miller

        very simple got dodge charger car in 2007. haven’t paid a note since 2011. it’s 2015 is tha Sol up for repo in tha state of Texas & can they still repo my car?

        • Credit Experts

          Sometimes car repossessions are governed by different rules than statutes of limitations for debt. We are not familiar with repo laws in every state. You could contact your state attorney general for more information.

          • Nehemiah Williams

            Hi i just financed my first vehicle through a dealership i have had the car for less than 2 months and it has already begun to break down on me ive already bought and replaced 2 sensors and a new battery i don’t even have my permanent tags yet and the car needs to go to inspection i can’t afford to put any more money into it i got it from WV but i live in MD pls help.!!!!!!

            • Credit Experts

              Nehemiah —
              Did you by chance purchase a warranty? Or have it inspected by a mechanic before you bought? (The second is pretty close to essential when buying a used car.) Particularly with a used car, some maintenance and repair issues are impossible to foresee because the car and its parts are not brand new. But read your contract carefully to see if you have any options other than to continue to repair and pay for the car.

              • Nehemiah Williams

                I will read my contract to see if there is a warranty when i get home but im curious because when i bought a part from the nissan dealership the sales man said that he might be able to put me in different car if i bring him all of the paper work about who i’m financing through and he said i might be able to do some kind of trade in with a new loan or something i don’t know but how can i trade a car in that i’m still making payments on is this a cheaper option pls reply back i haven’t established any credit yet so i don’t have good credit but i need a vehicle now to get back and forth to work.

      • Amy

        I got a car from car mart when i was pregnant with my first son. We didnt know anything about cars. We signed papers & got the car with 500 dollars down. From that day on we have been paying $108 aw week. I have another son on the way. My husband is the only one working. Paying all kinds of bills every week. His hours are getting cut. We barely making it. We both are young and have bad credit. What can i do? We want to return the car back but we already paid 7,000 since we got it and we have 6,000 left on it. That car is only worth 1300 dollars. Its a 2008 Suzuki

        • Gerri Detweiler

          We’re sorry to hear of the financial difficulties you’re having. This article was meant to describe your options when this happens and give you some to look into. It doesn’t sound like selling it is an option so you’ll either need to see whether you can work something out with the lender, or talk with a consumer bankruptcy attorney to find out whether you can use bankruptcy to keep the car, or do a voluntary repossession and avoid a lawsuit or taxes on the difference.

      • Maria Leamon

        My hubby died this passed November and the car was only in his name. I was keep up the payments but I was laid off from my job in June. I can no longer afford this car. Can I just take it back to the dealership?

        • Gerri Detweiler

          We’re sorry for your loss. You’ll want to talk with the lender about giving the car back. The dealership isn’t likely involved at this point.

      • Beverly morton

        Husband is in late 70. Got a new 2014 2 years ago. Had accident in June and got fired. Can’t work now. Payment are 526.04 and we are on SS only now. It’s eating all out saving. What is the easy way to give that car back. It’s is over 3100.00 on load. Thank you.

        • Credit Experts

          Beverly —
          There is not an easy way. One option is to try to sell the car. If you can sell it for what you owe (or more), that’s great. (If not, it may still make sense to sell and be rid of the car and insurance payments.) Another option would be to talk to your bank or credit union about refinancing for a lower payment. Here’s more information on that:Can You Refinance a Car?

      • Kyle Estrella

        I am leasing a 2011 Hyundai sonata for 19,000. I am now down to 17,000 thousand dollars over my head. Do I have to contact the bank that is leasing my car to me or the dealership?. I don’t know what my options are I just want to down size because I can’t afford to keep my vehicle any longer without staying behind financially.

        • Credit Experts

          Are you buying or leasing? And for how long?

      • Karen

        I can not afford to keep my vehicle because of insurance costs but haven’t missed any payments ~ price was overinflated & I paid way too much! When the bank sue’s me for the difference will they demand payment immediately?

        • Gerri Detweiler

          If they sue you and get a judgment against you then they will have to try to collect that judgment. In some states they can try to seize your bank accounts and/or garnish your wages. Have you thought about at least talking with a consumer bankruptcy attorney to find out what your options are?

          • Karen

            Yes , I was told secured debts are excluded from bankruptcy & it’s the only debt I currently have.

            • Gerri Detweiler

              Vehicle loans can sometimes be “crammed down” in Chapter 13 bankruptcy, which brings the loan amount down to what the car is worth and may reduce interest. Are you in a position to ask the attorney if that might be an option for you? ( You do have to have owned the car for at least 910 days before you go that route.) Did you get a chance to talk with the attorney about what your options are if they do sue you for a deficiency? It may be that would be the time to consider filing if you can’t afford to resolve the debt.

      • Manuel carela

        Hi I live in PA own a Honda Odyssey 06 I’m down to my last 2 payments. first I leased then financed now I’m late on my last two payments. when I called honda they said I still owe them $2300 after I make my last two payments because of interest there threatening me with repossession if I don’t pay both payments together. What can I do ?

        • Gerri Detweiler

          Unfortunately I just don’ t know. It depends in part on the terms of the contract. If you are being threatened with a repo, it would be a good idea to talk with a consumer law attorney. You may want to try the search function on the websites of the National Association of Consumer Advocates. If you can’t afford an attorney you may want to try Legal Aid. Another option would be to file a complaint with the CFPB but I’m not sure if they can assist in time to top the repo.

      • Janice stapp

        I have a car new my old car kept breaking down my new car I owe 16000 way over my head with insurance and car payments what do I do have no money to buy another car credit is shot any suggestions

        • Gerri Detweiler

          It sounds like a really tough situation. I wish we had an answer for you. We tried to describe the options in this type of situation in this article. Have you thought about talking with a bankruptcy attorney?

      • Mahogany Gist

        I previous leased a vehicle from a financing company. I no longer have this vehicle and I bought a new vehicle that I legally own and have the title to. Just the other day a tow company tired to tow my vehicle that I own say that my bank or financing as a repossession in order for this vehicle. Can the take away a vehicle I legally own because still owe on the lease vehicle and I have no idea where that vehicle is?

        • Gerri Detweiler

          I supposed it’s possible the second vehicle could be collateral for the first if you somehow agreed to that when you signed the contract for the newer vehicle. Do you still have your sales contract? Have you reviewed it? Unfortunately this is a situation where you probably need to talk with a consumer protection attorney.

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