Are you having trouble with your car payments?
As written for The Safe Driver.
Lockdown has been hurting you financially. You’re trying to keep up with all of your bills, but you’re still coming up short at the end of the month. One of the things you’re having trouble affording is your car. What can you do to manage the costs?
How to Cut Your Car Costs:
You’ve tried reworking your budget and pinching pennies, but you still don’t have enough to manage your car payments right now. You’re not alone. Lots of people in lockdown are having a hard time making ends meet, and their vehicles aren’t taking top priority over necessities like food and rent. So, what can you do?
Defer Your Payments
If you’re strapped for cash because of COVID-19, you need to call your car company to see if you can defer your loan payments for several months. There are car companies responding to COVID-19 by offering compromises for their clients that are dealing with financial hardship, giving them some time to get back on their feet.
Call Your Insurance Company
You should call up your insurance company, too. They may offer deferrals for payments or discounted rates for clients who are at home and no longer driving to work every day. Why should you be paying high insurance rates if you barely use your car anymore?
Embrace DIY
Embrace a do-it-yourself motto for the upcoming months. Instead of driving through a car wash, clean it up yourself. Instead of going to the mechanic for simple repairs and replacements, watch tutorials online and try it on your own.
What If That’s Not Enough?
Get Debt Help
These cuts might not be enough. If that’s the case, you may want to consider looking into debt help services. A licensed insolvency trustee can look at your situation and see if you need credit counseling or a consumer proposal to help you regain control over your finances. If those options don’t work, they may suggest filing for personal bankruptcy as a last resort. Click here to learn about the bankruptcy process and bankruptcy laws in Ontario to see what you will have to do and what assets are exempt from the settlement. Your vehicle could be exempt.
Consider Life without a Car
It’s possible that your vehicle is hurting you more than it’s helping you. You could be draining your wallet just to keep the car running. It’s not just car loan payments and insurance that’s eating at your savings. Think of something as simple as fuel. The average driver spends $145 on gas per month — that’s $1742 every single year.
Take an afternoon to calculate costs and get a good estimate of what you spend every single year on your car. Make sure to look at all of these factors:
- Car loan payments
- Car insurance payments
- Gas
- Parking
- Permits
- Repairs
- Maintenance
- Seasonal changes (for example: winter tires)
- Cleaning
Don’t forget that you can always encounter expensive surprises, like parking tickets, towing fees, or damage from collisions.
Could you live without your car? There are lots of other ways to get around. You could walk, ride a bicycle or use public transportation. Just think about how much you could save with this one change.