What should you do if you can't afford a car loan?

I recently moved to be closer to my family and help take care of my elderly parents. My new job doesn’t pay as well, and I’ve had to make some drastic lifestyle changes. I’ve been reviewing my budget, and there’s no way I can keep up with my car payments. What’s the best course of action if you can't afford a car loan?

Answer
I’m sorry to hear about the lifestyle changes and struggling to keep up with your car loan payments, but I’m sure your family appreciates you being closer!
If you can’t afford your car loan, you should immediately contact the lender to let them know about your situation. More often than not, the lender will work with you to modify the loan. Reaching out before you miss a payment shows you’re acting in good faith.
Besides modifying the loan, you can:
  • Refinance into a loan with lower payments
  • Sell or trade in the vehicle for one you can more easily afford
  • Surrender the vehicle or allow it to be repossessed
Finally, once you inform your car insurance company of your move, they will likely readjust your rate. If you want to ensure you aren’t overpaying, use Jerry, an insurance comparison app that shops for low prices with over 50 insurance companies for free. You will get quotes in seconds, can make changes at any time, and if you ever have any questions, agents are just a text away!
Jack Walsh
Answered on Dec 08, 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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