CHARLOTTE — Car payments are becoming harder for many families to afford as the cost of groceries, housing, insurance, and other bills continues to rise. Consumer Reports says if you’re struggling to keep up, the most important thing you can do is act early — before missed payments pile up.
New car prices have climbed sharply in recent years, with the average new vehicle now selling for nearly $50,000. Add in higher gas and insurance costs, and it’s no surprise that some drivers are falling behind. Recent Fitch ratings data show nearly 7% of Americans with lower credit scores were at least 60 days late on their car payments.
Thomas Nitzsche with the nonprofit Money Management International says many people hesitate to contact their creditors because they feel fear or shame about what might happen next. But waiting can make the situation worse.
Consumer Reports auto expert Keith Barry says the sooner you reach out to your lender, the more options you may have. Depending on your situation, your lender may be able to move your payment due date, set up a hardship plan, or defer a payment. If you have a strong payment history, the lender may be more willing to work with you to avoid delinquency or repossession.
Before agreeing to any plan, Consumer Reports recommends asking how it could affect your credit, late fees, and interest. Then make sure you get the agreement in writing.
Refinancing may also be an option. Barry suggests checking with banks, credit unions, and online lenders to see whether you can qualify for a lower interest rate. That could reduce your monthly payment or save money over time, but be careful about extending the loan term, because a longer loan can cost more in the long run.
If you lease your vehicle, getting out of the contract can be more difficult, but a lease transfer may be possible. Sites like Swapalease.com can help connect you with someone willing to take over the remaining payments. Just make sure your leasing company allows transfers and ask about any fees or whether you could still be responsible if the new driver stops paying.
Consumer Reports also warns drivers to be cautious of companies that promise to lower car payments in exchange for an upfront fee. Some scammers may even tell you to send payments to them instead of your lender. That money may never go toward your loan, leaving you further behind.
The bottom line: if your car payment is becoming unmanageable, don’t wait. Reaching out early can give you more options and help you avoid bigger financial trouble.
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