The coronavirus crisis (COVID-19) has made a financial impact on many American households. With more than 1 million worldwide cases and more than 6 million unemployed households, life is hard for many. The economic hardship has many car owners deciding between buying groceries and defaulting on their car loans. Those needing reliable transportation may put off a purchase due to concerns about job security. Automakers, lenders, and financial institutions are all working together to help you with options in the event you are unable to meet your car payment this month.
If you have found yourself among the millions of households affected by this, don’t panic. Understandably this can cause a great deal of anxiety. The most important part is to remain calm and know that you have many options and actionable steps.
Payment relief options from automakers
We are in a time where many automakers are very understanding of the position their customers are in and want to help. They are providing special incentives and payment relief opportunities during this difficult time.
Existing customers financing with the lending arm of automakers can be granted payment extensions at this time. Several manufacturers, including Acura, Mitsubishi, Kia, Ford, Subaru, along with many others, have announced payment relief to new buyers as well.
What to do if you can’t make your car payment
Start by taking a look at your existing budget. This may help you plan and avoid the situation entirely. You may be able to plan enough to minimize a pay cut or job furlough has on your overall budget. You may be surprised to find that your previous savings have allowed you to stay on track and make your loan or lease payment.
If, after looking at your household budget, assess that you will need assistance with your car payment loan or lease, these next steps should help you get back on track quickly.
Communicate with your lender as soon as possible
Communication with your financial lender is the first step. It can be humbling but know that many others are currently in the same position. Commercial lenders have established programs in place to help you and many others in this situation. Reaching out as soon as possible can mean the difference in resolving things quickly or having it negatively affect your credit.
Customer service teams have been trained to work with customers during this time and are prepared to offer you options tailored to your situation and help you find a solution. You’ll want to share the circumstances surrounding your payment delay. Whether that be a layoff from work, loss of a family member, or health concern, your lender will be able to offer options based on the financial hardship.
Options your lender may offer
Your lender may provide you with various options if you are unable to make your car payment. One option is a forbearance. A forbearance is a time that you can miss or make smaller payments until your situation improves.
Another option that may be offered is adjusting the loan terms of your existing payments so that you can manage the debt within your current budget. Financial lenders want to help keep you in your vehicle they can.
Should you be worried about repossession
If you have communicated with your lender, worked out suitable payment arrangements, and meet the terms of that agreement, you should have no fear of repossession. Lenders don’t want to take back your vehicle. However, if after three missed payment cycles, you have not reached out, lenders have no choice but to enact the repossession process.