Life can be unpredictable, and if you’re struggling to make your car loan repayments, you’re not alone. Whether it’s due to a change in income, unexpected expenses, or rising living costs, missing a repayment can be stressful – but knowing your options and acting early can make all the difference.
1. Contact your lender early
The most important step is to communicate with your lender as soon as possible. Avoiding the issue will only make it worse. Most lenders have financial hardship teams who can work with you to find a temporary or long-term solution, such as:
- Deferring payments for a set period
- Reducing your repayment amounts temporarily
- Restructuring the loan over a longer term
This is often referred to as a hardship variation and can give you breathing space while you get back on your feet.
2. Understand the consequences of missed payments
If you miss a payment and don’t contact your lender, you may face:
- Late fees or penalty charges
- A negative mark on your credit report
- Debt collection or legal action
- Repossession of your vehicle
Generally, a lender won’t repossess your car after just one missed repayment—but repeated defaults can lead to more serious outcomes.
3. Consider refinancing or selling
If the repayments are no longer manageable, you might consider:
- Refinancing: You may be able to refinance your loan to get a lower rate or longer term, which can reduce your monthly repayments.
- Selling the car: If you can sell the car for enough to repay the loan, this could be a clean way out. You’ll need your lender’s permission if the loan is secured against the vehicle.
4. Seek financial advice
If you’re feeling overwhelmed, it might help to speak with a financial counsellor. There are free and confidential services available across Australia that can help you understand your options and rights. Falling behind on your car loan isn’t the end of the road—but it’s important to act quickly. By staying informed and reaching out early, you’ll have more control over your financial future
Need help navigating your loan options? Reach out to our dedicated asset finance team today, for expert advice on loan restructuring, budgeting, or alternative finance options tailored to your situation and get the support you need to take the next step confidently.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent. Content developed in partnership with IFPA.
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