How Late on Car Payments Can You Get?

Many individuals are having trouble repaying their vehicle loans as interest rates and the cost of cars continue to rise.

In fact, a recent TransUnion analysis indicated that the percentage of vehicle loans that were more than 30 days past due was greater than in prior years, at 3.34% as of the second quarter of 2022.

Your credit may suffer if you miss a car payment, among other financial repercussions. So how far behind can you get on a car loan? What occurs if a car payment is missed? How many automobile payments must be missed before they are repossessed? Read more about the consequences of missing auto loan payments and how to prevent repossession.

What Takes Place if a Vehicle Payment Is Missed?

According to Michael Sullivan, a personal financial consultant with nonprofit credit counseling organization Take Charge America, "when you sign a financing or lease agreement on a vehicle, you agree to specific terms. These terms vary from lender to lender based on your credit, laws in your state, and the type of lender involved.

Consequently, if you don't pay as you promised, it may result in a number of things:

There will be a late fee. According to Sullivan, the first thing you should anticipate after missing a payment is a $25–$50 late fee.

Your loan has been listed as being past due. According to David Gelinas, practice administrator of National Legal Center, a law company based in New Hampshire that specializes in consumer rights and consumer safeguards, a car loan is classified as being late after 30 days of non-payment, which is a notation on your credit report. He continues that not all lenders may offer a grace period of approximately 10 days prior to notifying the credit bureaus about late payments.

Your credit will suffer. Your credit report and credit score will suffer if your lender reports the delinquency to the credit bureaus. According to Sullivan, a late payment can cost significantly more in increased borrowing charges than a $30 late fee because it stays on your credit report for seven years.

Your vehicle may be seized. A automobile loan is a secured loan, which means the actual vehicle is the security. The lender has the right to repossess the vehicle if you don't make your payments.

You could face legal action. A lender may pursue legal action to try to recoup costs and losses from your nonpayment even after your car has been repossessed.
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