Car Payments After Job Loss

Get Car Financing
Even with poor credit.

By

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - October 16, 2017

The loss of a job can cause a lot of stress but it shouldn’t be overwhelming when it comes to car payments. There are several options to consider, and consumers won’t have to give up their car in most cases. The best option is to talk to the lender.

Keep an Open Dialogue

Lenders prefer to keep customers over the alternative – defaulting on a loan. They may have a few options available if a borrower is worried about missing a payment.

If the situation is going to be brief, a consumer may be able to get a deferment, where a payment can be skipped without penalty for a short time. If the loan is current, the lender may allow deferment for at least 30 days. However, the skipped payment doesn’t disappear, it gets added to the end of the loan.

Another option that may be available is loan restructuring, which shouldn’t be confused with refinancing. Restructuring means the lender extends the length of the loan to create a lower monthly payment.

A third option – auto loan assumption – is not offered by every lender. In an assumption, someone else takes over the car payments and ownership of the vehicle, but must qualify for the loan under the same terms as the original borrower. This is most commonly done for lease vehicles.

Sell the Car for Profit

If there’s equity in a vehicle, it may be able to be sold outright. This could generate enough profit to buy a car for cash to bridge the gap until employment is found.

If Repossession is Unavoidable

Repossession isn’t something anyone wants to see sitting on their credit report for seven years, but if it can’t be avoided, opt for a voluntary repossession. In a voluntary repo, the borrower willingly returns the car to the lender, who will auction or sell the vehicle and use the money to pay the remaining balance. If the sale doesn’t cover the amount owed, the borrower is still responsible for paying what’s left.

Don’t Throw in the Towel

If you find yourself without employment for a time, don’t let your situation suffer unnecessarily. Make sure to keep communicating with your lender so you can work out the best option. If you’ve found yourself in a challenging credit situation and need a vehicle, CarsDirect wants to help! We work with a nationwide network of dealers that have the lending resources available to help people in many credit situations. Let us help guide you to a dealer in your area. Take the first step by filling out our no-obligation auto loan request form today.

Need a Car Loan?

It only takes a minute.

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


Search New Cars by Loan Payment »

View estimated loan payments based on local rebates and financing offers.

Loan approval is not guaranteed and is subject to credit application and approval of the lender. Individual loan terms may vary. Use of this website constitutes acceptance of CarsDirect.com's Terms of Use, Disclaimer, Privacy Policy, and Cookie Policy.