Behind on Your Auto Loan: Tips to Get You Back on the Road to On-Time Payments Once Again

About 7 million people in the U.S. were at least 90 days behind on their auto loan payments in early 2019, according to the Federal Reserve Bank

Falling behind on your auto loan can damage your credit score, incur late fees and even lead to repossession. If you find yourself 90 days or more past due, taking proactive steps can keep you in your vehicle and protect your financial future. Here’s what to do, and say—when you call your lender.

1. Contact Your Lender Immediately

As soon as you realize you might miss a payment, reach out. Early communication shows good faith and gives you access to the widest range of options, from temporary relief to long-term modifications. Waiting until weeks after a missed payment limits what your lender can offer and harms your credibility.

2. Request a Due-Date Adjustment

If your paydays don’t align with your loan schedule, ask to shift your due date to shortly after you receive income. Some lenders may waive one late fee as a courtesy when you make this change. If a date change isn’t possible, inquire about a one-time fee waiver to reduce immediate costs.

3. Negotiate a Catch-Up Plan

Lenders often work with borrowers to create feasible catch-up strategies. Common plans include:

• Payment deferral: Postpone one or more payments, spreading past due amounts over the remaining term.
• Extended term: Increase your loan length to lower monthly payments, though you’ll pay more interest overall.
• Biweekly payments: Divide your monthly payment in half and pay every two weeks to align with paychecks and reduce interest faster.

Confirm any new schedule in writing, ideally via email—and ensure the lender updates your account record accordingly.

4. Assess Vehicle Affordability

If your budget has permanently shifted, a more modest vehicle may be prudent. Selling your car outright often yields higher net proceeds than trading it in, which can leave you “upside-down” on the new loan. Calculate your outstanding balance versus retail value to decide whether refinancing, selling or trading is best.

5. Explore Refinancing

Refinancing at a lower rate can reduce monthly payments. Check offers from:

• Your bank or credit union
• Online lenders with prequalification options
• Peer-to-peer lending platforms

Compare total costs, fees, new rate and term—before committing, and ensure the new payment fits your revised budget.

6. Seek Nonprofit Credit Counseling

Nonprofit agencies offer free or low-cost advice on budgeting, debt management and loan options. A trusted counselor can advocate for you, negotiate with your lender and help you create a sustainable repayment plan.

7. Know Your Rights

You’re protected from unfair practices. Lenders must provide clear payoff quotes and cannot charge unauthorized fees. If you suspect errors or mistreatment, contact the Consumer Financial Protection Bureau at consumerfinance.gov for guidance and to file complaints.

Key Takeaways

• Address delinquencies early, don’t wait for multiple late notices.
• Ask for due-date changes, fee waivers and catch-up plans.
• Evaluate affordability: consider refinancing, selling or trading your vehicle.
• Use nonprofit credit counselors for free, expert assistance.
• Report unfair lender practices to the CFPB.

Taking action now can stop late fees, protect your credit score and keep you on the road. Pick up the phone, call your lender and forge a path back to on-time payments.