Image you have purchased your dream car at last, and can’t wait to enjoy your time behind the wheel. Everything would be perfect, if only you didn’t have to struggle with the loan. Falling behind with the payments makes the driving less delightful indeed.
If you can get by without the car, maybe it is not such a great idea to go through this financial ordeal. On a brighter note, there are many options to help you if you can’t make your payments. You can avoid a financial breakdown or having to let go of your precious car.
Time is money
You need to assess your financial situation first. If your expenses are higher than your earnings, perhaps you have bitten off more than you can chew. You might start thinking about taking on a part time job or selling your clothes on eBay. In any case, make sure you can afford the car before you even consider buying it. Falling a bit behind on your payments is one thing, but having to take out several mortgages on your house is quite another.
Making sacrifices to buy a vehicle you crave for can be quite doable, but if you took your chances and now curse the day you took the car magazine into your hands, here are a couple of things you should do to avoid a financial crash.
First of all, try to reach an agreement with your lender. Some solutions may seem beneficial at the first glance, but cost you more in the long run. It is thus always a sound option to get rid of your debt as soon as possible and take advantage of equity auto finance solutions.
You can switch to bi-weekly car payments to pay off the debt faster, which will save you a lot of money in interest rates. There are also other loan modifications like refinancing and lowering the interest rate that can help you get back on your feet much faster.
The decision the lender ultimately makes will not depend much on your charm and wit, but your credit score. If you are just facing a temporary hardship, then your chances of negotiating better terms are higher. Keep in mind that it is in the lender’s best interest to keep you as a customer, so he could be more willing to negotiate than you realize.
It could also be worth checking out cheap used cars to get finance on rather than trying to get something that you might have trouble repaying.
The biggest fear for many buyers is that their car will be repossessed. In that case, you could still owe the lender more money if the vehicle is sold for a lower price. So, you would be better off selling the car yourself than letting this happen. If you find the right buyer you can pay off the debt and avoid the headache.
Another option is to trade your car for a cheaper one. Put an ad in the paper or browse online trading websites. Try to think of a friend who is looking to buy an affordable car for his teenage kid. If you end up with some money in your pocket you can roll it into a new, more affordable car loan.
On the road again
If you feel cornered by the financial difficulties, just remember there are always options at hand. They might not be perfect, but they will help you avoid a financial disaster, or at least mitigate its dire effects. To gain debt freedom, you need to make some tough choices. You mustn’t let your new car become a burden instead of a convenience. Get back on track with your finances, and then you can get back on the road. You will enjoy the carefree driving like never before.