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What if I can't pay my car loan?
Some friends and I bought a small restaurant a few months before the COVID pandemic, and it’s been an absolute money pit ever since. I’ve been struggling to cover my bills each month—it’s pretty bad. What will happen if I can't pay my car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Owning a restaurant with friends is something many people dream about! I’m sorry the timing wasn’t right for it, but I wish you the best moving forward!
If you can’t pay your
car loan
, the lender could repossess your vehicle. Missed payments and repossession will negatively impact your credit score. So, ensure that those options are your last resort.Instead, you should contact the lender immediately to discuss your options. Typically, a lender will let you defer payments or modify the loan, especially if you contact them prior to missing a payment.
However, if you can’t modify the loan or it’s still too costly after doing so, you could:
- Refinanceinto a loan with an interest rate and terms that better accommodate your financial situation
- Surrender the vehicle and get out of the loan
- Sell or trade in the vehicle to purchase one you can more easily afford
Additionally, to help cover your monthly costs and ensure you don’t miss a payment, you can save on your
car insurance
using Jerry
. Jerry is an insurance comparison app that shops for low prices from 50-plus top insurance companies, like Travelers, Nationwide, and Progressive.After providing you with a comprehensive analysis of the best policies across providers, Jerry will handle the phone calls, paperwork, and renewals for your top pick so that you don’t have to. They even help cancel your old policy! Why do all that extra work when Jerry can do it better?
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- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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