It’s going to be a financial nightmare for many people soon or maybe is already.
I just wanted to share some tips as a former collections person (who once repo’d cars 😳) if you might soon be or already are unable to make your car payment.
- DO NOT IGNORE CALLS OR HANG UP ON THE LENDER IF THEY’RE CALLING FOR PAYMENT. Most lenders now have software programs that document every individual account interaction or attempts of contact. If you’re hanging up on them- you’re showing you’re uncooperative. If you have ZERO communication with your lender – the lender will likely result to repo’ing the vehicle sooner. If you are hanging up on the person assigned to collect payment- they will more than likely repo the vehicle sooner than they normally would.
- TALK TO THE LENDER DAYS BEFORE YOU KNOW WILL BE PAST DUE. Why? Some lenders might have a ‘DUE DATE CHANGE’ option. Many of them do not offer this option if the account is already past due. Ask the customer service representative the furthest date you can push your payment to. (Please be advised that if you have a simple interest contract – you will be paying those additional days of interest because you extended your contract mature date. That is unless you payoff early or refinance your loan.)
- MAKE PAYMENT ARRANGEMENTS. If you’re actively trying to make payments – it shows cooperation. Collectors are more likely to work with you if you’re trying. Especially if you’re making payments little by little. You may still be subject to a late charge if the payment is not paid in full if stipulated on your purchase contract. Also, if the full payment amount is not paid and received by the lender within the 30 days of your due date – it might also ding your credit. (Be mindful of the payment method you use. Some payment methods take days to post or be received. So if you mail a check on day 27 – it might take over a week to be received and cleared. By the time it’s been processed- you’re over 30 days past due.)
- ASK FOR AN EXTENSION. Some lenders will allow you another month to make your payment by extending your contract. Why use that as a last resort? Some only allow 1 EXTENSION for the life of the loan. So if you really need it – you might not have this option again. You also extend another month of interest by doing this if you have a simple interest contract. (Lenders may require proof of hardship to grant an extension.)
- HAVE GOOD CREDIT? TRY REFINANCING. If your credit has improved from your time of purchase – you might qualify to refinance at a lower rate and lower payment. When you refinance – the new lender payoffs your old loan and contracts you with a payment due date 30 days from your new refinance contract date.
UNABLE TO GET IN CONTACT WITH A CUSTOMER SERVICE REP OVER THE PHONE? Check the lender‘s website. Some now offer the Due Date Change option online or email them.
I hope these tips help during this difficult time.
Please contact your lender to verify which options you have available.
Stay Safe Everyone.