1. Late Fees: You may be charged late fees for each missed payment. These fees vary from lender to lender, but they can add up quickly and increase your total debt.
2. Default Notice: After a certain number of missed payments, typically two to three months, the lender may send you a default notice. This notice informs you that you are in default on your loan and provides a specific deadline by which you must bring the account current.
3. Repossession: If you fail to make the payments required in the default notice, the lender may repossess your vehicle. Repossession involves the lender taking physical possession of your car and selling it to recover the outstanding loan balance.
4. Legal Action: In some cases, the lender may take legal action against you to collect the outstanding debt. This may include filing a lawsuit and obtaining a judgment against you. If a judgment is entered against you, the lender may be able to garnish your wages or seize other assets to satisfy the debt.
5. Voluntary Surrender: As an alternative to repossession, you may voluntarily surrender your vehicle to the lender. This involves giving up ownership of the car in exchange for the lender canceling the remaining loan balance.
6. Work with the Lender: If you are facing financial difficulties and are unable to make your car payments, it is important to contact your lender as soon as possible to discuss options for resolving the situation. Some lenders may be willing to work with you to create a modified payment plan that fits your circumstances.
It is crucial to take action promptly to address any missed car payments to avoid potentially severe consequences, including repossession, legal issues, and damage to your credit score.
