- Get in touch with your lender at the first sign of trouble. Don't beat around the bush. Tell your lender that you're having trouble making payments. If your lender feels as though you are a good customer, you might be granted deferred payments so that you can keep your vehicle. Should your lender be in a negotiating mood, be sure to get the terms of the revised agreement in writing.
- Refinance. Don't assume that your lender would like nothing more than for you to lose your car due to an inability to make payments. If you play your cards right, your lender might be able to lower your payments by extending the length of the agreement or by slashing the interest to make payments more manageable.
- Sell the car and use the proceeds to pay off loan obligations. Before doing this, find out how much you owe and how much the car is worth. You can find out the former by contacting your lender and you can determine the latter by consulting sources such as Kelley Blue Book or Edmund's. Be sure to check into whether or not your lender will actually penalize you if you pay off your loan sooner than the time stipulated in the financing pact.
- Tighten your belt. You might be surprised to see how much money you can save by reducing expenses in other areas. Maybe you could cut or eliminate costs by brown-bagging your lunch rather than tucking into a pricey meal at a restaurant or diner. An excellent resource to help you reduce expenditures is our Recession Survival guide located at http://www.atg.wa.gov/economy.aspx. You might also want to consult a credible credit counselor to help you devise a budget that you can actually stick to.
In the event that you do find yourself going toe-to-toe with the repo man, be sure to arm yourself with knowledge about your rights in by going repo cars guide for more information. John writes articles on a variety of consumer related services and issues including repossessed cars.
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