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What happens if you stop paying your car loan?
My finances are pretty tight at the moment, and I don’t think I’m going to be able to pay all my bills this month. I’m trying to find which ones I can miss or delay until next month. My car payment is pretty expensive, but I’m hesitant to not pay it. What happens if I stop paying my car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
I’m sorry to hear about your financial situation, but do not stop paying your
car loan
. If you default on your car loan, your credit score will be negatively affected and, the lender could repossess your vehicle. Fortunately, lenders don’t typically repossess the car over a single missed payment, but the delinquency will stay on your credit report for seven years. If you’re struggling to make the monthly payment on your car loan, you should contact the lender immediately and explain the situation. Reaching out before you miss a payment shows you’re working in good faith, and the lender may be able to help or negotiate a solution.
Alternatively, if you have trouble making the payment each month and not just when finances are tight, you may want to consider
refinancing
the loan. Refinancing will replace the current loan agreement with a new one that can make repayment more manageable. If you want help finding low rates for new car loans, try using the
Jerry
app. No matter what your credit score is, Jerry makes refinancing your car easy by comparing quotes from multiple lenders to find a rate that works best for you. On average, car owners pay $85 less every month by refinancing their auto loan.You also don’t want to miss a payment on your
car insurance
because it is illegal to drive without insurance, and you risk having a lapse
in coverage that could end up being more costly in the long run.You can find ways to save money on your car insurance, too!
Jerry
also compares car insurance rates from more than 50 top providers, including Nationwide, Allstate, and Travelers, and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance! View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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