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What happens if you stop paying your car loan?

My finances are pretty tight at the moment, and I don’t think I’m going to be able to pay all my bills this month. What happens if I can’t pay my car loan bill?

avatar
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Do not default on your loan payments: You’ll face the following severe consequences if you stop paying your
car loan
:
Fortunately, lenders don’t typically repossess the car over a single missed payment, but there’s no avoiding the effects on your credit. Consider the following options instead of skipping a car loan payment:
  • If you’re struggling to make a single monthly payment: Contact your lender immediately to explain your situation. Reaching out before you miss a payment shows you’re working in good faith, and the lender may be able to help or negotiate a solution.
  • If you’re struggling to make all your monthly payments: You may want to consider
    refinancing your car loan
    . Refinancing will replace the current loan agreement with a new one that can make repayment more manageable if you can find better loan terms.
Expert tip: If you need help lowering your car payment, try using the
Jerry
 app to compare your refinancing options from multiple lenders. Jerry helps the average car owner save $85 a month by refinancing their auto loan with a lower rate. 
MORE:
How to reduce car payments without refinancing your car loan
Auto Loan PaymentsCar Loans
View full answer 
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