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Zuto Customer Service

What happens if I can’t afford to make payments on my car finance agreement?

Car finance plans are typically taken out over 3 to 5-year terms so it’s very difficult to predict what financial situation you’ll find yourself in in years to come. People's circumstances often change - especially when significant events such as pandemics occur - and you may find that you're no longer in a position to afford your car payment.

If at any time you find yourself in this situation, the first thing you’ll need to do is get in contact with your lender directly. They will be able to advise you of your options which will depend on the length of agreement left, amount owed and the type of finance you took out.

If you took out either a hire purchase agreement, or a personal contract purchase, and have paid off half the total balance, you may be able to activate the voluntary termination element of your contract which means you are able to hand back the vehicle with nothing more to pay.

With a personal loan, an option might be to sell the vehicle and use the funds to pay off the loan amount. If you’re not in a position to sell your car due to work commitments as an example, then you’d need to speak to your lender about what options are available to you.

Missing payments can have an adverse effect on your credit file so it’s always best to speak to your lender as soon as you can. If this has happened to you in the past and you’re now looking for car finance with bad credit then Zuto could help. We work with lots of lenders who help customers with a less than good credit score.

Written by

Mike Barlow

Content Manager

Mike has worked at Zuto since 2018 and uses his experience within the industry to help customers understand the ins and outs of car finance.

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