Behind on Auto Payments? You're Not Alone.
By: Lisa Farnen
If you feel like you’ve been struggling to keep up with car payments, you’re not alone: According to a recent report from the Federal Reserve Bank of New York, over 7 million Americans are at least 90 days behind on their auto loans.
It’s no secret that increased financial stress can weigh heavily on your personal well-being. The good news is, your credit union and our financial wellness partner, GreenPath can support you with the tools and resources needed to handle these types of situations. Here are a few tips on how to avoid late auto loan payments.
- Take a deep breath and know everything will be okay. Make a commitment to focus on what matters most.
Your situation may feel desperate, but don’t panic! Take a deep breath, relax, and commit yourself to stay focused on your needs and goals.
Continuing to make payments on your debt is key. If you already have a spending plan, stick with it as much as you can, and make any necessary adjustments so that you can still meet your needs.
- Get a full picture of your current expenses and develop a spending plan.
Now is an important time to get an understanding of your full financial picture so you that you can make any necessary adjustments to get back on track.
This Budgeting Worksheet from GreenPath is a great tool for tracking your income and expenses, to get a better picture of your current financial situation. It can also help you identify expenses to cut back on so that you can get back on top of your loan payments.
Once you’ve cut out unnecessary expenses, it’s important to make a plan for how you will pay your remaining expenses (aka a spending plan.) A spending plan makes it easier to stick to your goals and avoid the temptation of splurging on something when you’re feeling down. It can also help you avoid late auto loan payments.
Commit to paying off your quality of life expenses first- things like rent, groceries (and your vehicle payment, since your car is essential to your ability to earn an income.) Then, see if there are additional areas where you can cut spending (non-essentials like subscriptions and entertainment) until you are back on track.
- Investigate your options. Addressing your needs proactively can help you get back on track sooner.
It’s very likely that if you are behind on your auto loan payment, we will be actively reaching out to you, as is the case with all lenders. Fight the urge to avoid our calls and try to have an active dialogue with us. We don’t want to repossess your vehicle, and will work with you to create a flexible plan for your needs. The sooner you can discuss your situation with us, the better.