Most of us have been there—hard times. Paying your bills feels out of reach, and the stress it causes can amplify the entire situation. One thing many people fear during a tough economic time is the loss of their car. People rely on vehicles to do many things. They use it to drive to school, run errands, go to work and even to go to job interviews so they can try and find their financial footing again.
Are there solutions if you are facing the inability to pay, or even repossession? There are—but the first thing to look at is how you can prevent being in that position at all.
Buying a Car that Works for You
It's easy to fall into the trap set by some salespeople. You have every intention to buy an economy car, or something you can afford—but there's a special, zero down or something else that tempts you into a more expensive car. That will always be the number one mistake. The key to a successful car purchase is buying something you can pay for, even if you run into financial issues.
A reputable inhouse finance dealership will sit down and talk about the big financial picture. With their experience, they're able to screen you and determine what amount is ideal for your situation. However, that still won't guarantee that something unforeseen happens.
What to Do if You Run into Financial Problems
The economy has been shaky at best, along with job security. You may be a phenomenal employee, but that doesn't mean that cuts won't affect you. What steps can you take if you lose your job, are unable to work or get slammed with a big bill you weren't expecting?
- Communicate – Before you start taking the steps to secure yourself, make sure you communicate with your lenders. If you rent a home or apartment, let your landlord know right away and see if there is anything you can do.
- Unemployment – If your job is lost due to cutbacks, a business closing or anything that wasn't your doing—make sure to file for unemployment. It will be a financial bridge until you've found new employment.
- Determine what to do about rents or mortgages – Your living situation is important. If you own a home, call the mortgage lender and explain what is going on. See if they can postpone a few payments, or maybe you can just pay the interest. For renters, if there's a way to live elsewhere for free, find out if you can sublease. If the space is big enough, there is also the possibility of taking on a co-renter. Explore every avenue.
- Talk to creditors about solutions – Believe or not, many people want to work with you to find a solution. Ask about freezing payments, or paying less for a short period of time. Another option is to refinance to lower your payments. Most importantly, just open the conversation.
- Don't be afraid to ask for help – There are programs in place for a reason. It is for people who need help temporarily. Look up local assistance programs and use them if you need to.
As you're taking some of these steps, make sure to list out your budget completely—all you income, savings, debt, payments, etc. Look at places you can cut back. Get rid of expenses that aren't necessary. Also try to prioritize your bills. You don't want to lapse on insurance, it's your safeguard. When you make agreements with companies, make sure to get it in writing.
It's not always easy to face money hardships, but ignoring it will only make it worse. Face it head on, and do what you can to improve your situation. Remember too, that another way you'll save your vehicle is by taking the right steps in the first place.
