Quick Fixes to Avoid Defaulting on Your Car Loan
As of the spring of 2023 the average car on the road is 12.5 years old; this means that our roads are experiencing the highest percentage of geriatric vehicles they have witnessed in decades. The price of cars is so expensive these days that more people are holding onto their cars until they have traveled 250,000 miles or more, purely out of economic necessity. This does not mean that all of the drivers of these clunkers own them outright. Some old cars on the road are in the possession of their second or third owners, who financed the purchase of the vehicles. For both new and used cars, the average monthly car loan payment is $729, so you are not alone if you are struggling with your car payments. If you know that you cannot afford to keep paying $700 month after month, you should act quickly. For help choosing the best option to avoid defaulting on your car loan, contact a Boca Raton debt lawyer.
If You Can Live Without Your Car
Tara Seboldt of Clever Girl Finance has listed several ways that borrowers who are in danger of defaulting on their car loans can avoid default. Some of the solutions she proposes require you to give up your car. You should only do this if you have other plans in place for transportation, or else any money you could save by not paying a car payment will quickly disappear as you pay for rideshare rides. For example, it makes sense to give up your car if you live with your spouse, your parents, or a roommate, and your household can manage with one fewer car than it currently has.
For example, you can sell your car. If you sell it to a place like Car Max, it will pay off the balance of your loan and give you a check for any money that remains from the sale. If you cannot do this, then voluntary repossession lets you get out of your car loan agreement by giving up your car, but it is less financially damaging to you than if the bank repossessed your car.
Ditch the Loan, but Keep the Car
It is also possible to get out of your current car loan situation while keeping your car, but this usually means more debt in the short term or long term. For example, you can refinance your car loan. You can also take out a debt consolidation loan to pay off the remaining balance of your car loan. This way, you will have a lower interest rate and lower monthly payments. There is also the option to trade in your car for a less expensive one with less to finance and lower monthly payments, but finding an affordable car in today’s market is no simple task.
Work With a Debt Lawyer About Avoiding Default on Your Car Loan
A South Florida debt lawyer can help you if you are in danger of defaulting on your auto loan. Contact Nowack & Olson, PLLC in Boca Raton, Florida to discuss your case.