Many of us have faced some serious financial challenges in the past couple of years. If you’ve been struggling financially, you may be concerned about making the payments on the vehicle you have to have to keep working so you can pay your bills. When car payments are out of reach, you may have to get creative.
Be Up Front With Your Lender
Make sure that you are upfront with your lender. Your bank doesn’t want to own your car. They don’t want to deal with storing it, maintaining it, insuring it, or selling it. Their goal is to collect payments. According to experts at Lantern by SoFi,” if you can refinance a car with the same bank, you can possibly save fees and even lower insurance.”
Your dealership, on the other hand, maybe happy to take back the car that you’ve been paying on. If you borrowed from a car dealership, have a conversation with your current bank. Many of us get our paychecks direct deposited; this is a wonderful way to prove that you are getting a regular check and can be relied upon to make steady payments.
Extend the Loan Terms
If your car is fairly new, consider refinancing the loan for a longer term. This can turn the remaining 3 years of your debt into five years. You will have to carry full coverage for longer, but you can be sure that you can make those payments without dealing with the monthly stress.
While stretching out the terms, consider changing the payment date. If you get paid from your main job on the first but your side hustle pays out on the 10th, make your car payment due on the 15th. If you can, arrange with your bank to take out half of your car payment on each payday to avoid a once-monthly hit.
Carefully Track Your Needs
Do you still need a car? There are situations and times when you have to have a car. However, there are also situations and times when you can get by without one. If you know the lender won’t take any more late payments, take the hard step and choose to turn in the keys instead of waiting for the repo company to come to collect it.
Another great option is to sell it for what you owe. If you know that you can manage without a car for a time, be ready to make a payment or two to make up the remainder of what the bank is owed. A repossession will be hard on your credit and make it even harder to buy another car. Even if you have to turn over the cash at the time of sale, selling to a private buyer can save you a lot of hassle in the future.
Refinance With Help
If you have someone who will co-sign on it for you, you may find that your credit rating actually goes up, which may save you money on your insurance. Should you be lucky to find a co-signer, take this time to review your budget thoroughly. Consider paring back your spending to just the basics. Cover your needs only, and hit your car payment hard so you can get ahead on loan. This will be a great way to build new habits and honor your co-signer.