Can't Afford Your Car Payment? Here's What To Do
Struggling to make your car payment? Fast action prevents repossession. This guide covers every option from lender deferments to voluntary surrender.
You need your car to get to work, but the payment due date is coming and the money is not there. Maybe hours got cut, an unexpected bill wiped out your account, or you are in between jobs. Whatever got you here, you are not alone—and you have more options than you might think.
The single most important thing to know right now: acting early gives you more choices. The longer you wait, the fewer options remain.
We may earn a referral fee from lenders in our network. This does not affect the guidance below.
Step One: Call Your Lender Before You Miss the Payment
Most people avoid this call. That is usually the wrong move. Lenders have handled this situation hundreds of thousands of times, and many have formal hardship programs that are never advertised publicly.
Call the customer service number on your statement and explain your situation plainly. Specifically ask about:
- Payment deferral — Many lenders will let you push one or two payments to the end of your loan term. You still owe them, but the immediate crisis passes without a missed-payment mark on your credit report.
- Reduced payment arrangement — Some lenders will temporarily accept a partial payment while you stabilize, rather than beginning the repossession process.
- Loan modification — In some cases a lender will restructure the loan to lower your monthly payment by extending the repayment period.
None of these is guaranteed. Lenders are not required to offer them. But many will work with you if you call before the payment is late, rather than after you have already missed it.
Your Options Side by Side
| Option | Best When | Credit Impact | Typical Timeline |
|---|---|---|---|
| Call lender for hardship arrangement | Before or just after missing a payment | Minimal if resolved before default | Immediate |
| Request payment deferral | Short-term cash shortfall | Minimal | 1–5 business days |
| Refinance your auto loan | Credit improved or rates dropped | Soft inquiry to compare offers | 1–2 weeks |
| Sell the car yourself | Balance owed is close to or below car value | None | 1–4 weeks |
| Personal loan to bridge the gap | Small shortfall with stable income ahead | Soft inquiry for prequalification | 1–3 business days |
| Voluntary repossession | All other options exhausted | Significant; stays 7 years | Immediate |
Can You Refinance Your Auto Loan?
If you have been making on-time payments for several months, your credit score may have improved since you first took out the loan. Even a modest improvement can qualify you for a lower monthly payment through refinancing.
Refinancing replaces your current auto loan with a new one—ideally at a lower rate, a longer term, or both. A longer term means smaller monthly payments, though you will pay more in total interest over time. If the immediate goal is surviving this month, that tradeoff can make sense.
Start by prequalifying with your current lender and at least one or two others. Prequalification typically uses a soft credit check that does not affect your score, so you can compare offers without penalty before committing to anything.
What About Selling the Car?
If your car is worth roughly what you owe—or more—selling it privately is one of the cleanest ways out of an unaffordable payment. Private sales typically bring higher prices than a lender's auction would, giving you a better chance of covering the remaining loan balance.
Call your lender to get the current payoff amount (request it valid for a specific date a week or two out). Then compare that figure to what similar vehicles are selling for in your area. If the math works, a private sale eliminates the problem entirely without a negative mark on your credit history.
If you owe more than the car is worth, you would need to cover the gap at closing to pay off the loan. A small personal loan can help in that situation: borrowing a few hundred or a few thousand dollars to close the difference is often cheaper in the long run than the credit damage from a repossession. Visit our get-started page to check personal loan options quickly, without affecting your credit score.
A Word on Using a Personal Loan to Make the Car Payment
If the shortfall is temporary—your next paycheck covers it, or a check from a family member is incoming—a small personal loan can bridge the gap and keep your auto loan current. Funding can sometimes happen within one to three business days.
This only makes sense if the personal loan payment does not simply move the problem forward. Before taking on another debt obligation, make sure the monthly payment fits your budget going forward. See our guide on emergency loan options for a comparison of what is available when you need cash fast.
What Is Voluntary Repossession?
If no other option works, voluntary repossession means you return the car to the lender rather than waiting for them to collect it. This is not the same as making the debt disappear.
Your lender will sell the car—usually at auction. If the auction price is less than what you still owe, which is common because auction prices are typically low, you remain responsible for the difference. That leftover amount is called a deficiency balance, and the lender can pursue collection on it.
The repossession and any unpaid deficiency balance appear on your credit report and can remain there for up to seven years. Voluntary repossession is viewed somewhat less harshly than an involuntary one by some lenders, but it is still a serious negative event.
If you end up with a deficiency balance afterward, read our post on what happens if you default on a personal loan for context on next steps and your options.
If You Have Already Missed a Payment
The timeline before repossession varies by state and lender—but it can begin after as few as one or two missed payments, and in many states repossession can happen without advance notice.
Even at this stage, a call to your lender may still help. Lenders often prefer a reinstatement arrangement over the cost and hassle of repossession and resale. Reinstatement lets you catch up on all missed payments at once—plus any late fees—to bring the loan current and keep the car.
For a broader plan when finances are unraveling, see our guide on what to do in a financial emergency.
What to Do Next
Make the call to your lender today—before the payment goes officially late if at all possible. If you need fast cash to bridge the gap, visit our get-started page to check personal loan options in under two minutes without affecting your credit score.