Lower your car payment without losing sight of the total cost.

A payment that no longer fits your budget deserves attention now. You do not need to wait until you miss a payment to ask for help. Your loan servicer is the company that receives your payments, which may differ from the dealer that sold you the car.

Collect your latest statement, check the next due date and estimate what you can pay consistently. Then ask the servicer about its options. An inquiry does not guarantee a change. Keep paying under your existing agreement until the servicer confirms a different arrangement.[1][2]

1. 01

   Check your next payment

   Write the amount, due date, account status and amount you can pay.

2. 02

   Call your servicer

   Ask about relief, the payoff quote and any early payoff fee.

3. 03

   Compare written choices

   Record the payment, number of payments, fees and total remaining cost.

4. 04

   Confirm the result

   Save the agreement and verify the old loan is paid if you refinance or sell.

Use the number on your statement or the verified lender website. Describe the change in income or expenses and when you expect it to end. If the problem is ongoing, say so. Ask what options apply to your account and whether you must submit a request or documents.

A representative may describe an extension, payment plan, due-date change or other modification. Availability and eligibility vary. Ask for a written agreement before relying on an offer, and check the payment schedule and conditions carefully.[1][2]

• Due-date change: May align the bill with payday; it does not erase principal or guarantee a lower payment. Check first-payment timing and any interest effect.
• Deferral: Postpones payments, not debt. Interest may continue, and some plans postpone principal only.
• Catch-up plan: May add overdue amounts to future payments. Get the full schedule and check affordability.
• Modification: Ask about a lasting change. A longer term can lower payments while increasing interest. Approval and suitable terms are not guaranteed.

Compare the written proposal with your current schedule before agreeing.[2][4]

Your statement balance may differ from the amount needed to close the loan today.

• Request a payoff quote: Check its expiry date, daily interest if applicable, payment instructions and any prepayment charge. Update it if closing moves.
• Estimate the car’s value: Compare several purchase offers or valuation tools.
• Calculate loan-to-value: Divide the amount owed by vehicle value. $20,000 owed ÷ $16,000 value = 125%.

A high ratio may affect an offer or require cash at closing. Credit, income and other lender criteria also matter.[5][6]

Use AnnualCreditReport.com to obtain your credit reports. If you find an error, dispute it with the credit bureau and the company that supplied the information. A report is not the same thing as a score. Ask each lender whether an initial quote uses a credit inquiry and whether a later application requires another one.

CFPB says auto-loan inquiries generally count as one inquiry when made within a 14-to-45-day shopping window. Scoring models differ, so do not assume every inquiry is treated the same way. A quote or prequalification is not final approval.[7][8][9]

Refinancing replaces the old loan with a new one. A lower rate or longer term can reduce the payment, subject to approval.

Before applying to banks, credit unions or other lenders, check:

• Vehicle and loan limits: Age, mileage, minimum balance and loan-to-value rules.
• Lender requirements: Membership, proof of income, insurance and title information.
• Existing customers: Whether the lender refinances its own loans.

Compare several offers. A quote is not guaranteed until the lender completes its review.[5][6][10]

APR helps compare yearly credit cost, but it does not replace the payment schedule. Compare costs from today forward:

• Current loan: Remaining scheduled payments and any final payment.
• New loan: Future payments plus cash costs at closing.
• Fees: Identify amounts paid in cash, added to the balance or included in the payoff. Count each once.

Past payments are already spent in both choices. Ask lenders to use the same payoff dates and assumptions when estimates differ.[10][11]

This example is hypothetical. Assume a $20,000 payoff today, monthly payments, fixed rates and no prepayment penalty. The existing loan has 48 payments left at 10% annual interest. Each refinance adds a $300 fee to the balance, so $20,300 is financed. There are no cash fees or other charges. The amounts below use unrounded payments and are rounded to cents.

The examples isolate the change in rate and term. Actual simple-interest loans, daily interest, closing dates, rounding and final payments can differ. Ask lenders for their actual written disclosures.[5][11]

• 48-month refinance: Payment falls by $11.67; remaining cost falls by $560.13.
• 60-month refinance: Payment falls by $95.64, but remaining cost rises by $348.57. Repayment lasts 12 more months.

The $300 fee is already included in the new loan and payments. Do not add it twice. If paid in cash, add it to the payment total instead. Include any current-loan payoff penalty not already in the quote.[5][11]

CURRENT REMAINING COST
Sum of all remaining scheduled payments

NEW REMAINING COST
Sum of new payments + cash paid at closing
+ other required future charges not in those payments

MONTHLY CHANGE = current payment − new payment
TOTAL CHANGE = current remaining cost − new remaining cost

Count each fee once. Include any final payment.

Selling may remove the car payment only if the existing loan is paid off. First request a current payoff quote. Then compare realistic purchase offers with that quote. A private buyer and a dealer may pay different amounts, and the sale may involve costs. Ask your lender how it releases its lien and transfers the title.

Negative equity means the payoff exceeds the car’s value. If the payoff is $20,000 and the sale price is $16,000, the gap is $4,000 before sale costs. You need a way to resolve that gap with the lender. Ask for the payoff and title process in writing before accepting money or handing over the vehicle.[12][13]

On a trade, ask the dealer to show the vehicle price, trade allowance, old payoff, any negative equity, fees and new amount financed as separate lines. Verify the payoff reached your old lender after the transaction. A promise to pay off the old loan does not mean the dealer absorbed negative equity.

Voluntarily returning the vehicle is different from selling it. Unless the lender agrees otherwise, you may still owe a deficiency after it sells the vehicle. Get any agreement to satisfy the loan in full in writing. Repossession and deficiency rules depend on the contract and state law.[3][4][12]

Read the current contract and the new offer. The advertised payment may omit costs.

• Loan charges: Check prepayment penalties, title or lien fees, origination fees and required cash. The current contract and state law govern any early-payoff penalty.
• Optional products: Review GAP and service contracts. Early cancellation or a partial refund may be available; terms differ.
• Refund handling: Ask who processes it, how it is calculated and whether it reduces the balance or comes to you.

Do not assume GAP transfers to the new loan. Check the new loan and insurance needs before canceling coverage.[5][14]

A guaranteed reduction, upfront fee or instruction to stop paying your lender is a reason to verify the offer. FTC warns about auto-loan modification scams.

• Verify contact: Use a servicer number you find independently. Do not send money or account details to an unsolicited caller.
• During refinancing: Follow the old agreement until the servicer confirms payoff. Ask both lenders how to handle a payment due during closing.
• After payoff: Save confirmation. Check the new account, first due date, autopay instructions and final balance. Signing alone does not close the old loan.

MY CAR PAYMENT PLAN
Next payment and due date: __________________
Amount I can pay each month: ________________
Servicer and verified phone: _________________
Payoff and good-through date: ________________
Estimated vehicle sale price: ________________
Equity or gap: ______________________________

Option A: payment / months / total: __________
Option B: payment / months / total: __________
Cash fees and required closing funds: ________
Relief decision and next due date: ___________
Contact / reference / follow-up date: ________

Keep account numbers and identity documents private.

If none of the options creates an affordable plan, contact the servicer again before the next missed payment. Ask about a different arrangement or a sale process. A nonprofit credit counselor may help you review the budget and debts. If repossession is imminent or has occurred, local legal aid or your state consumer protection office can explain rules that apply to your situation.[1][3][16]