Almost 15% of Americans who financed a new car at the end of 2022 are now paying more than $1,000 a month for their vehicles. This is the highest percentage recorded and the numbers are expected to keep growing.
Pricier car notes increase the chances of late and missed payments. If you are strapped for cash this month, you might be dealing with this issue.
How many car payments can you miss before repo? Keep reading to find out.
How Many Car Payments Can You Miss Before Repo?
The answer to this question isn’t black and white. It will depend on your loan agreement and the laws in your state.
The repossession process can begin after just one missed payment since you are considered delinquent. Many lenders seek payment before repossession, so explain your situation and discuss options.
It’s more common for two or three consecutive missed payments to lead to vehicle repossession. Before this happens, you might experience these negative impacts on your credit and finances:
- Late fees
- Sending your account to collections
- Negative marks on your credit report
Late car payments can lead to these issues as well. It’s best to pay your monthly statement as soon as possible to avoid major repercussions.
What to Do If You Miss a Payment
Knowing the answer to, “How many car payments can you miss before repo?”, might leave you more stressed. Since one payment can cause you to lose your vehicle based on repossession laws, it’s best to act fast.
Take these steps to try to get back on track:
Evaluate Your Loan Terms
If you aren’t already familiar with your loan terms, now would be a good time to check them. Find your paperwork and look for information on the total loan balance, grace periods, and late fees.
If you can’t find the information in your documents, call your lender to ask for details.
When you can’t afford your car payment, you need to evaluate your financial situation. If paying late or missing a payment is a rare occurrence, follow the next step.
Budget for Your Loan Payment
Budgeting will help you take care of overdue payments and future payments. You can make lifestyle adjustments to make on-time payments until the end of the loan.
Cut expenses where needed to make payments. You can ensure your next payment doesn’t fall through the cracks by applying for payday loans in Florida.
Discuss Options With Your Lender
After implementing these tips, you might find that you are still unable to make payments. Reach out to your lender to discuss refinancing options to lower your monthly payment.
You’ll have to pay a higher interest rate but changing the terms can help you afford your bills.
Eliminate Missed Payments in the Future
How many car payments can you miss before repo? The answer will depend on your state’s laws and your loan terms. It could be as little as one missed payment or up to three consecutive missed payments that lead to repossession.
Eliminate missed payments in the future by taking out a loan, managing your budget, and discussing options with your lender.
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