Managing your finance
Missed a Car Finance Payment? What to Do
Missed a car finance payment? What happens next and how to put it right.
If you've missed a car finance payment, contact your lender straight away — most will work out a plan if you act early, and a single late payment is far less serious than ignoring it. Repeated misses can lead to a default and, eventually, the car being repossessed.
Lenders are required by the FCA to treat customers in difficulty fairly, so the worst thing you can do is go quiet. Here's what to do.
What happens if you miss a car finance payment?
One missed payment usually means a late-payment fee and a marker on your credit file; ignoring it can escalate to a default and repossession. Acting fast keeps it small.
A single late payment is recoverable. The danger is several in a row, which can trigger a default notice. Knowing your settlement figure — work it out on the settlement calculator — also tells you where you stand if catching up isn't realistic. If you're struggling longer-term, look at lowering your payments or pausing payments.
What to do after a missed payment
Contact your lender, explain your situation, and agree a way to catch up — that's the single most effective step. Follow this order.
- Pay the missed amount now if you can, to stop it escalating.
- Call your lender — don't wait for them to chase you.
- Explain whether this is a one-off or a longer money problem.
- Ask about a payment plan, payment holiday or a lower monthly.
- Get any agreement in writing and stick to it.
The costs and credit impact
A missed payment can mean a fee plus a mark on your credit file that lasts up to six years. The longer it goes unpaid, the bigger the hit.
Lenders must treat you fairly under FCA rules, including when you're in financial difficulty, so engaging early often means smaller consequences. Free help is available from charities like StepChange and Citizens Advice.
Don't let it reach repossession
If you can't afford the car at all
If the payments are no longer affordable long-term, ending the agreement may be better than struggling on. Voluntary termination can be a clean exit once you've paid enough.
If you've paid 50% of the total, voluntary termination lets you hand the car back and owe nothing more. Otherwise, selling the car and settling the finance may help. Work out the figures on the settlement calculator.
Frequently asked
What happens if you miss a car finance payment?
What should you do after missing a car finance payment?
How long does a missed car finance payment stay on your credit file?
Can your car be repossessed for missing a payment?
Work out your next step
Independent calculators — pick the one that fits your situation.