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Missed a Car Loan Payment in Canada? Here's What to Do Next

Missed a Car Loan Payment in Canada? Here's What to Do Next

Life throws curveballs, and sometimes you end up missing a car loan payment. Don't panic! Here's a guide to help you get back on track, minimize the damage, and avoid repossession.


The first thing you should do is not panic. You will need to move fast but there is absolutely no need for panic. There are three simple steps to handling missed auto loan payments.


Sit Back & Take Stock

First things first. What happened? Why did you miss the payment? Did you forget? Did the automatic payment have insufficient funds? Did it just not go through?


Prepare For What's Next

Exactly what you do next depends on what caused you to miss a car payment in the first place.



  • Can't Afford it (Short Term): you need to gather the evidence to show to the lender. You may receive preferential treatment for extenuating circumstances as long as you can prove it and prove that it won’t happen again.


  • Can't Afford it (Long Term): you’re doing to need to have a conversation with the lender. If it’s a short-term thing, a payment holiday or single payment deferment may be enough. To learn more about what to do if you can't afford payments anymore, click here.


If it’s longer term, you may have to look at alternatives. They include refinancing the loan, transferring the loan, selling the car, or taking that payment holiday.


Take Initiative

Whatever you did in the first two steps, it’s now time to talk to the lender. Set everything in your mind, gather evidence, and prepare to call them.


Explain what happened and explain what you have done to prevent it from happening again, if appropriate. If you forgot the payment, having set up automatic payments may be enough to settle everything down.


If you have affordability issues, you’ll need a longer conversation about what to do next and what options are open to you. Temporary situations like illness and COVID could potentially be addressed with a payment holiday.


Longer-term situations like unemployment may require more substantive measures. Much will depend on your situation.


What is essential is to take control of the situation. Find out what happened and why. Take remedial action and then work with the lender to decide what happens next.


Taking initiative goes down well with the majority of auto loan companies. It shows you take your responsibility seriously and that you’re taking control of your finances. If you demonstrate this, most lenders are predisposed to helping you out after missing a car loan payment in Canada.


After all, it’s as much in their interest to have you complete the loan too!


Thanks for reading! If you have any more questions, please don't hesitate to contact us.

Categories: Car Loan

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