Fix My Finances

If you have a car that’s on loan and are having financial troubles, beware of the banks! You don’t want them coming after you for your car. Cars can easily be taken from you if you don’t have your loan paid off - even without a fore-warning that it is going to be taken.

If you can get out of a car loan when you are buying a car - do it. This way, you will ensure that you will at least have a set of wheels to last you for a while. Remember that no matter what type of car you get, it’s instantly devalued once you start driving it. This means that if it is something that can get you from point A to point B, it’s good enough.

If you are in a car loan and are behind in payments - know the rules. Every bank will be a little different with how they deal with you. Most likely, you will have the option of falling behind by an average of 3 months before repossession starts to sink in and to be monitored by the banks. Before this, you will probably have some calls to get the situation sorted out.

If you receive a notice saying that you have a certain amount of time to pay off the car before it is repossessed, consider yourself to have the next 2-3 weeks to try and make a minimum payment. This will offset the payment by another 30 days. While it will keep you hanging on a thread, it will allow you to keep your car until you can start catching up.

If your car is this far behind, pay the minimum as soon as you can and call the bank. As long as you are making some sort of payment, they will work with you (hopefully). You can ask for an extension for the next two months, especially if you let them know that you are having financial difficulties. If you do this, don’t just call once, call every week. Sometimes, banks and the customer service individuals won’t notate what they are supposed to and will take the car anyway. You have to be overly responsible for others who are sitting on the other side - just to make sure you keep your car.

With these steps, you will at least have a safety net of some sort to fall back on. If your car does get repossessed, you still have 10 days to pay and catch up. However, remember that you will have to pay the amount for 3 months, plus a ton of extra charges. If you really want your car back, you can pay partial payments and get extensions until you can catch up.

If this isn’t an option, never fear! Repossession may drive your credit partially down for a while, but car dealerships will work with you to get a new car. Repossessions actually help, because it shows that you are ready to make a new commitment for a loan that you are willing to pay.

If you need a set of wheels, but are in a financial crisis, you can work around the system in order to help get you out of the situation. With some consistent communication and a little bit of effort, you can keep your car around and pay off your loan while keeping the car.

Brooke Hart wrote this on April 17th, 2008 and filed it under Car Loans |