The effect of the global pandemic has been challenging for everyone, especially auto loan borrowers, as there are no government-backed relief programs to cover a monthly car payment. 

Before finding yourself in this situation, you can:

• Ask your lender about forbearance programs. Share with them your details and documents if the reason is your illness or any other issues. Your lender may offer a delayed payment option in this aspect. 

• Be sure to get a pre-approved loan to give yourself some leverage when negotiating the interest rate.

• Refinancing is also one option if you have an excellent credit history and you have stable employment.

If you’ve missed even one payment, and you are on the verge of getting your vehicle repossessed, here is what you can do:

• The loan agreement that you have signed should state how many payments you can miss.

• Even if you have not missed enough payments to have your car repossessed, the lender can take your vehicle due to inadequate auto insurance.

• You need to find your contract with the lender’s loss mitigation or collections department to explain the situation that you are in. By contacting early, you will create a record of attempts to satisfy the loan.

Note: If you’re already in danger of having the car repossessed, there is a way to mitigate the financial impact: voluntary repossession.

Indeed, a significant issue is that car repossession can also remain on your credit report for almost seven years, making it more challenging to qualify for any other loan. 

But a car repossession is not the end of the world, and you need to make intelligent decisions beforehand.