An important part of a successful budget is fitting all of your monthly expenses within your income. As part of your ongoing budget review, you might find yourself in a situation where you feel like you can’t afford your car payments. If that’s where you’re at, you have several options to get some relief. Each of these options comes with its own set of pros and cons, and you’ll want to review them carefully to see which option might be right for you.
Contact the dealership and request a trade
One of the first steps that you can take is to contact your dealership and see if you can trade in your vehicle for a more affordable version. This might be easier to work out if you originally bought your car through the dealership and your loan is financed by it. That might make the dealership more responsive in working things out with you.
But even if that is not the case, it is worth contacting the dealer to see what options might be available to you. Depending on the price difference between your current and new cars, and the term and rates of your new car loan, you may be able to save a significant amount of money by trading down to a less expensive car.
Be aware that the current state of the used car market may make trading your car a bit more difficult. Prices of used cars have climbed significantly over where they were a few years ago. So, depending on what kind of car you are trading in and what kind of car you’re looking to get instead, it may be more challenging than expected.
Request loan modification
Another option that you have if you can’t afford your car payment is to request a loan modification. With a loan modification, you work with the lender to change the terms of your loan. This could include lowering your interest rate, deferring payments for a period or changing your payment’s due date so it…
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