"What actions can a lender take if you can't make your car loan payments? "

I'm just wondering what to expect in case the worst happens and I can't make my payments.

Answer
“Sometimes circumstances change after you have already committed to a car loan. You can lose your job, run into unexpected and unavoidable expenses, or experience other financial calamities that cause you to miss payments on your loan.
The consequences for missed payments can be swift and severe. With most loan agreements, the lender can begin collection activities after just one missed payment. These activities will include the following (probably in this order):
  • Reporting your late/missed payment to the credit bureaus. Even if you do eventually pay what you owe, the late payment will have been recorded already and your credit score will suffer.
  • Making increasingly insistent phone calls, sending emails and text messages, and/or even making personal visits demanding immediate payment.
  • Repossessing the car to sell it and raise the money you owe.
Any one of these things can cause heartburn and sleepless nights, as well as great inconvenience — you will have difficulty securing things like credit and insurance in the future.
Although lenders have the right to do all of these things, in practice, they would prefer that you get back on track. When you think you may be in trouble, contacting the lender and trying to work out an arrangement before you miss a payment can help you avoid these problems. Depending on who the lender is — and if you have a clean payment record and you’re being upfront about your situation — they may be very flexible. “
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Jim Donaher
Answered on Apr 06, 2021
Jim Donaher is a freelance writer and manager with over 35 years' experience in the insurance, banking, and investment management businesses. He provides expertise on a range of topics and is able to explain complex industry information in layman's terms. Jim is the author of two books, including Call Him, He's Home: A Guide to Prayer for Regular People and Then Larry Smiled, a novel about life, death, accountability, and salvation. Taormina, Sicily is his happy place!
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