Don’t Let Your Car Note Drive You Crazy

In the final months of the year, car dealers typically pull out all the stops to move vehicles off their lots. And let’s admit it: most of us like to drive a nice ride.

But what if you’re already in over your head with an expensive car note?  It’s time to think about getting from underneath that burden.

Here are four options for dealing with overdue car payments or other issues when you’re struggling to pay for your vehicle:

  • Get a Payment Extension

If your financial difficulties are temporary, or if you just hit a brief bad patch, you may be able to convince your auto finance company to give you a payment extension.

Here’s how it would work: the auto company would allow you extra time to make a payment (without reporting you to the credit bureaus). Alternatively, they could agree to let you forego one or two payments in the near-term, and then tack on those extra payments to the end of your car contract. Either way, you keep the car, get a bit of breathing room financially, and don’t do damage to your credit rating.

  • Rewrite Your Contract

As an alternative to getting your car repossessed (which, believe me, auto companies don’t want to do), you might inquire about having your contract re-written.

Perhaps they would agree to a longer repayment period, lowering your payments. Or in some instances, you might qualify for a lower interest rate. In some cases, this is a long-shot. But it’s worth pursuing before they take the car for non-payment, or you do a “voluntary” repossession, both of which will seriously mar your credit rating.

  • Consider Refinancing Your Auto Loan

If you try to negotiate with your existing auto finance company, but can’t get them to budget, you might consider refinancing your auto loan with another lender — especially if that will get you a much lower interest rate, which in turn will lower your car payment.

Many people don’t know that you can refinance your car loan, just as you can refinance a mortgage. But a car refinancing is easier, faster and requires no points, appraisal or closing costs. To lower your car payments, try Capital One Auto Finance (, the top online vehicle lender in the United States. Refinancing takes just 15 minutes and saves an average of $1,353 over the life of the loan.

What will you do with the money you save? Pay down credit card debt or build up your savings.

  • Save Money on Other Car Costs

If all else fails, maybe you can lower other car costs. In addition to your monthly payment, there are a lot of other expenses involved with having a car, like gas, maintenance, insurance, and parking.

To save money on gas and parking, you can give up a paid covered parking spot and park for free on the street, try carpooling for a while, or even take public transportation when necessary to avoid feeding quarters in a meter or shelling out cash at a garage.

To save on car insurance, opt for a higher deductible in exchange for 10% to 25% off your annual premiums, or ask your insurer about good driver discounts, discounts for having an alarm system, or lower rates for taking a defensive driving course.

Any of all of the steps above can help keep your vehicle costs reasonable — and keep your car from driving you crazy.

“Ask The Money Coach” is a syndicated column written by personal finance expert Lynnette Khalfani-Cox, co-founder of the free financial advice blog, Follow Lynnette on Twitter at @themoneycoach.