NASHVILLE, Tenn. (WTVF) — Car payments are getting harder and harder to afford as Americans also pay more for groceries, housing and insurance.
So how do you get all of the bills paid and still manage to drive a car?
For many people, it can feel like something has to give. But experts say if you are struggling to keep up, there are steps you can take before the problem gets worse and you fall behind.
If your car payment is getting harder to make, you are not alone.
New car prices have soared in recent years, with the average new vehicle now selling for nearly $50,000. Add in rising gas and insurance costs, and recent Fitch Ratings data show Americans with lower credit scores are having a harder time keeping up. Nearly 7% were at least 60 days late on their car payments.
Experts say the first step in getting back on track is acknowledging the problem early.
“A lot of people are very resistant to talk to their creditors because they have fear or shame around what's going to happen next,” said Thomas Nitzsche with the nonprofit Money Management International.
And the longer people wait, the more missed payments can add up.
Consumer Reports says the sooner you reach out to your lender about your financial situation, the better.
“Lenders usually have options available,” said Keith Barry with Consumer Reports. “They might offer to move your payment due date, be able to set up a hardship plan, or defer the payment. Especially if you have a good payment history, your lender might be more willing to work with you to avoid delinquency or your car getting repossessed.”
Before agreeing to a plan, experts say drivers should ask how it could affect their credit, late fees and interest. They also recommend getting the agreement in writing.
Another option may be refinancing a car loan.
“Check with banks, credit unions and online lenders, because you might be able to get a lower interest rate that could save you money,” Barry said. “But just be careful. If you make the loan term longer, it could cost you more in the long run.”
For people who lease their vehicles, getting out of the contract can be difficult. But a lease transfer may be an option. Websites like Swapalease can help connect drivers with someone willing to take over the remaining payments.
“Just make sure your leasing company allows it, and ask about fees or whether you could still be responsible if the new driver stops paying,” Barry said.
Experts say the sooner drivers deal with a car payment problem, the more room they may have to work things out.
They also warn consumers to be careful with companies that promise to lower car payments for an upfront fee. Some scammers may even tell people to send payments to them instead of the lender. That money may never go toward the loan, leaving drivers out the money and still behind on their payments.
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