The Risk of Car Loan Payment DelinquencyJuly 22
If you think you can hold off on making your auto loan payments, think again. In most cases, creditors have the right to repossess your vehicle if you fall behind on three payments in succession. And don’t think they won’t act. Lenders are worried about the economic climate, and the longer you stay delinquent on your payments, the more risk they incur. They will stop the bleeding quickly by repossessing the vehicle. Most of the time they will then turn around and sell it at auction in order to recoup as much of their investment as possible.
This is especially true if you buy your car with a Buy Here Pay Here car loan, as these bad credit car dealers are notorious for repossessing vehicles whose owners don’t make payment. In fact, in some states these dealers are allowed to install remote engine kill switches to aid in vehicle recovery. How would you like to go out to your car in the morning to go to work and find that it won’t start. Or how about if the same thing happens on your way home, so that you’re stuck in the company parking lot as the recovery specialists arrive to tow your car away?
The best defense against car loan delinquency is a good offense. From the outset, you should buy a vehicle that truly fits your budget. Don’t overspend, or stretch your finances. In this economy, nobody’s job security is as good as it used to be, and though you might be high-flying now, making your payments with ease, remember how quickly that income can dry up if you or your significant other gets laid-off. It’s better to play it safe than sorry, and don’t buy more vehicle than you can really afford.
22 Jul 2010 | 1:08 pm | Automotive
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