Category: | Personal Finance

Missing Your Car Payments

Missing your car payments can create all sorts of problems in many different areas. As most of us rely on a car to get us to work it is essential to make sure you have enough money set aside to make the payments and if your budget shows that this is placing too much of a strain on your finances then you might need to downgrade to something more affordable.

Finance companies are legally entitled to repossess your car without getting a court order if you miss your payments and they can do so without warning. When this happens the repossession will be noted on your credit records and will remain there for the next seven and a half years so this is one area of your spending where you will need to make the appropriate decisions in advance of anything happening.

Once your car has been repossessed the finance company will generally advertise it for auction to help recover the outstanding amount of the loan.

Unfortunately for you the problem of debt doesn’t stop there. If the vehicle is sold for less than the amount still owing on it, plus the costs involved in repossession and selling the vehicle, then you will be liable to repay that deficit to the finance company.

So you will have lost the use of your car which will impact on your ability to get to work and earn a living and you are still lumbered with the debt that will need to be repaid to the finance company.

If you are struggling to make the payments it is better to contact the finance company in advance of any action to see whether you can refinance the vehicle over a longer period where the repayments will be a little less and more manageable. They might also give you the opportunity to pay off any outstanding debt by coming to a suitable arrangement. This could give you enough time to sell the vehicle paying off the loan and finding something that is more suitable for your current financial position.

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