Your car is probably your lifeline. For many people, it is not a luxury but an essential item. You use it to get to work, do the shopping, take the children where they need to go, and other simple but important tasks.
Unfortunately, COVID-19 has turned the world on its head. You still need your car but probably no longer have the financial stability to be sure that you can keep affording the repayments. It’s certain to increase your stress levels, which is not good for your health.
Create A Budget
You should already have a budget but now is a good time to redo it, or create one if you’ve never done one before. Simply list your current COVID affected income and then complete a list of all your monthly payments.
You will find there are some items that you no longer need, canceling these will help you to find extra money for the car payment. You can also look at replacing your payments. For example, get an array of car insurance quotes, you’ll almost certainly find that you can replace your current insurer with a cheaper one.
By taking stock of your current finances and making a few changes you’ll be surprised at how much money you can free-up for your car payments
Speak To Your Lender
Now that you know your financial position you can call your lender and tell them you’re having financial difficulties thanks to COVID-19. Many lenders are offering relief programs. The exact details will depend on your lender.
But, you could get a payment holiday, reduced installments over a longer period, a final settlement amount, or they may even write-off your loan. The decision will be based on your current situation, what help the loan company can get from the government, and what amount you have outstanding.
It’s highly likely that your loan provider will help you out and allow you to keep the car as long as you stick to the new payment arrangements.
Of course, changing the terms of your loan does mean you’re likely to pay more interest in the long term. But, in the current climate, this can seem like a small price to pay to maintain your credit rating and keep hold of your wheels.
You’ll need to check the conditions of your car payments to find out if you can resell or refinance your vehicle. One of these should be an option and will allow you to raise the funds you need while reducing the monthly payment and keeping your car.
It may not seem like a great time to refinance but, if you still have a regular income, you’ll find there are some great deals available.