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?

Answer
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:
  • Refinance into 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?
Jack Walsh
Answered on Dec 09, 2021
Jack is an insurance specialist and writer living in Buffalo, New York. He has a BA from Union College and worked as an insurance agent with Jerry before joining our content team. He enjoys using data and research to break down complex subjects and convey a story. In his spare time, Jack enjoys cycling, cooking, and exploring Buffalo’s beautiful waterfront.
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