Missing a car payment can lead to serious consequences like credit damage and even vehicle repossession. With many borrowers struggling to keep up with payments, it’s important to understand how late you can be on a car payment, the potential risks, and what steps to take if you miss one.

What Happens When You Miss a Car Payment?

Missing a car payment sets off a chain of events that escalate as time goes on. Here’s a step-by-step look at what you can expect:

1. Grace Period

Most auto loans have a grace period of 10 to 15 days. During this time, you can make a late payment without penalties. Review your loan agreement to confirm the specific grace period offered by your lender.

2. Late Fees

After the grace period ends, lenders typically charge a late fee. This fee varies but can be significant, depending on the lender.

3. Negative Credit Reporting

If your payment is over 30 days late, the lender may report it to credit bureaus. This can significantly lower your credit score and remain on your credit report for up to seven years.

4. Limited Payment Options

Some lenders restrict online or automatic payment options for delinquent accounts, making it harder to catch up.

5. Repossession Risk

Since auto loans are secured by your vehicle, lenders may repossess the car if you fail to make payments. While repossession often occurs after multiple missed payments, it can legally happen after just one.

How Many Payments Can You Miss Before Repossession?

The timing of repossession depends on state laws and lender policies. Some states allow lenders to repossess a vehicle after just one missed payment, while others may wait until you are 30 to 90 days past due.

Repossession can happen without advance notice, so it’s crucial to act quickly. Contact your lender immediately to explore options before missing multiple payments.

What to Do If You Miss a Car Payment

Taking prompt action can prevent further complications. Follow these steps to minimize the impact of a missed payment:

1. Review Your Loan Agreement

Check your loan terms to understand the grace period, late fees, and repossession policies. This will help you plan your next steps effectively.

2. Contact Your Lender

Proactively reach out to your lender. Many lenders offer payment plans, deferments, or other solutions if you communicate early.

3. Pay the Missed Amount

If possible, pay the overdue amount to prevent penalties and further delinquency. Adjusting your budget or using emergency savings can help you catch up.

4. Request a Payment Arrangement or Deferment

Ask your lender if they can spread the overdue balance across multiple payments or extend your due date.

5. File a Credit Insurance Claim

If you purchased credit insurance with your loan, check if it covers missed payments due to job loss or disability.

6. Consider Refinancing Your Loan

Refinancing can lower monthly payments, but it’s best to act before your account is over 30 days delinquent.

7. Sell the Vehicle

Selling the car can provide funds to pay off the loan. If the loan balance exceeds the car’s value, you’ll need to cover the difference.

8. Voluntarily Surrender the Vehicle

As a last resort, you can return the car to the lender. While it avoids repossession, it still impacts your credit and may leave you owing a balance.

Monitoring Your Credit After Missed Payments

Missed payments can damage your credit score, but monitoring your credit can help you recover. Use services like ScoreSense or Smart Credit to track your progress and identify areas for improvement. Regular monitoring ensures you’re aware of any changes and can take steps to rebuild your credit.

How Late Can You Be on a Car Payment Without Serious Consequences?

The grace period provides some flexibility, but going beyond 30 days late can result in severe consequences like credit damage and repossession. The key is to act quickly. Whether you’re contacting your lender, refinancing, or exploring other options, immediate action can make all the difference.

The Bottom Line

Knowing how late you can be on a car payment helps you avoid the worst-case scenarios. Missing a payment doesn’t have to lead to repossession or long-term credit harm if you address the issue quickly. Be proactive, communicate with your lender, and consider all your options to keep your finances on track.

For ongoing credit monitoring and guidance, rely on trusted services like ScoreSense and Smart Credit to ensure you’re informed and prepared for any financial challenges.

If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and TikTok!