What Happens When You Miss a Car or Car Insurance Payment

NEWPORT BEACH, Calif. - Dec. 14, 2023 - PRLog -- In September 2023, the percentage of auto borrowers who were at least 60 days late on their bills rose to 6.11%, according to a Fitch Ratings report. That is the highest default level in nearly three decades.

Taking out an auto loan is how many people finance their vehicles, especially when buying newer cars. These loans are typically provided by banks, credit unions, manufacturers or financing companies, allowing you to spread the cost of a vehicle over several years at an interest rate, which varies according to credit score and special offers from the manufacturer.

While an auto loan can make purchasing a car more affordable, it also comes with responsibilities. Making regular, on-time payments to repay the loan is crucial. So is continuing to pay for full-coverage car insurance, which is required when you take out a loan.

Missing auto loan and car insurance payments can have severe consequences, including financial penalties, damage to your credit score, and, in some cases, vehicle repossession. Here's what happens when you miss auto loan payment and car insurance payments.

Key Takeaways

• Contacting your lender if you're going to miss a car payment is the best way to avoid fees.
• A missed payment will begin to hurt your credit as soon as 30 days after a missed payment and much more heavily 60 days after.
• If you will be missing many car payments, it's a good idea to trade in the car for a less expensive one.
• Your car can be repossessed after non-payment and if you are uninsured.

The Impact of Missed Car Loan Payments

Missing a car loan payment can have serious consequences, and the later you are the worst it will be. A grace period for being late is usually not more than seven to 10 days.

Here are some things that happen when you don't pay your car note: https://smartfinancial.com/auto-loan-and-insurance-payments