Missed a Car Loan Payment? Here's What to Do Next
Missed a Car Loan Payment? Here's What to Do Next
Posted on March 31, 2023
Life happens and work, kids, home and the many draws on our time can get in the way. We all know that and we all have to work with it. So, what do you do if you missed a car loan payment in Canada amongst all that?
It’s easy to do if you don’t have automatic payments set up. You work late, the kids are sick, you’re running around trying to keep everything together and you forget what day it is.
What happens next?
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?
If the system failed through no fault of yours, skip to the final step.
If it was something else, assess what happened, see what you can do to prevent it, take those preventative measures move on to the next step.
Prepare For What's Next
Exactly what you do next depends on what caused you to miss a car payment in the first place.
If you forgot to make the payment, set up automatic payments right away. Then skip to the final step.
If you have insufficient funds, are ill, lost your job, or something else, 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.
If it’s an affordability issue, 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.