Moral of the story? You want to do everything you can to avoid a repossession. And while we don’t put much stock in credit scores, there’s a big difference between having no credit score because you don’t borrow money, and ruining your credit because you’ve made some bad decisions with money. It’s a giant mess to deal with and totally trashes your credit. And then they’ll sue you for the difference.ĭon’t let car payments hold you back! Learn the proven plan to win with money. But that’s a big mistake. Why? The lender will most likely sell the car at auction for a much lower price than you could get for it if you sold it yourself. You might think you can just surrender your car back to the lender (that’s called voluntary repossession) and you’ll be off the hook. Having a car payment keeps you in debt and paying way more for a car in the long run than you should. While you might be able to lower your interest rate or get a slightly lower monthly payment by refinancing over a longer term, you’re only addressing a symptom of a much bigger problem. They may be tempting, but trust us, they’ll only leave you worse off than when you started. Okay, so now that you know which path to take to get out of your car loan, let’s talk about some options you should avoid. (And yeah, you can actually find something cheaper-even in this market!). It’ll take some discipline and determination, but you can do it.īut we’ve got one more question for you: Do you really love your car? Like, love it enough to let it keep you in debt longer? Even if you can pay it off in less than two years, you might want to sell it and get something cheaper for a while. Throw as much money as you can toward your car loan. Start by getting on a budget, cutting back your spending, and picking up a side hustle. Plus, there’s a lot you can do to pay off your car loan faster. But the sooner you knock out this car loan, the more money you’ll save in interest-and the sooner you’ll be driving a paid-for car! And the idea of paying more than you are right now might seem impossible. Listen, we know that car payment is already giving you trouble. If the total value of your vehicles isn’t more than half your income and you can be debt-free within two years, it’s time to get serious about paying off your car loan early. Then, once you sell the car, you’ll have enough to pay off the loan and get something in your price range (more on that in a minute)! Try Craigslist, social media sites, word of mouth, etc. Next, start spreading the word that you’re selling. The market for used cars is hot right now, so you might be able to get more for it than you think. Your first step is to check out Kelley Blue Book to find out how much your car is currently worth. But you deserve to own your car, not have your car own you. And we’re not saying you can never drive that same car again later on. We know this can be painful (especially if it’s your dream car). And if your car payment is tying up your income and keeping you from becoming debt-free in the next two years, then it’s definitely time to get rid of it. The quickest way to get rid of your car loan is to sell your car. That’s the super quick answer, but let’s break down each option. If yes, keep the car and pay off the loan. Can you pay off the car in two years or less? Is the total value of all your vehicles (things with a motor in them) more than half your annual income? And which one you should do comes down to how you answer these two questions:ġ. So, how do you get rid of a car payment? Well, you’ve got two main options: Pay off the loan or sell the car. We’re going to show you how to get out of a car loan once and for all! And you’re thinking, Will I always have a giant car payment?ĭon’t let your ride wreck your finances. ![]() But now that car loan is starting to feel like a real thorn in your side. And the dealer made it seem like you’d have no problem affording the monthly payments. Or maybe it was the only decent one you could find after you totaled your old Toyota (RIP Blue Steel).Įither way, you took out a car loan to secure your new (or new-to-you) wheels. ![]() Maybe you had your eye on the car for a while.
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