Car loans · Elgin Auto Sales & Service Center · Elgin, IL
What Happens If You Miss a Car Payment
A missed or late car payment can lead to late fees, credit damage and, in time, repossession. Here is what to check and what to do first, based on the Consumer Financial Protection Bureau's auto loan guidance.
Late feesset out in your loan paperwork
Grace periodcheck whether your loan has one
Creditlate payments can hurt your score
Call earlycontact your lender or servicer
The short answer
Your loan paperwork shows what counts as an on-time payment, whether there is a grace period, and how much the lender can charge in late fees. The CFPB says paying on time helps you avoid late fees, possible repossession and damage to your credit. If you know you cannot make a payment, contact your lender or servicer as soon as possible to ask about options such as a payment plan, a new due date or forbearance, and get any agreement in writing.
Check your loan terms: due date, grace period and late fees
The CFPB says the paperwork you get with a new auto loan, including the welcome letter from your lender or servicer, tells you where to send payments, what counts as an on-time payment (usually when the lender receives it, not when you mail it), whether there is a grace period, how much the lender can charge for late fees, and who to contact if you have trouble making payments.
Your Truth-in-Lending disclosure also lists the number of payments, the monthly payment and the late fees. If you have an existing loan and are not sure who to call, the CFPB says your monthly statement should include the lender or servicer's name and contact information.
From How do I know who my auto loan lender or servicer is? (Ask CFPB) and What should I know before I finalize a car or auto loan? (Ask CFPB), read November 9, 2026.
What can happen when you miss a car payment
The CFPB lists these risks of late or missed auto loan payments:
| Result | What the CFPB says |
|---|---|
| Late fees | Paying on time helps you avoid late fees; your loan paperwork shows how much the lender can charge. |
| Payments applied to fees first | A monthly payment generally goes first to fees due, such as late fees, then to interest, then to principal. |
| Credit damage | Falling behind on car payments affects your credit, which can make it harder or more expensive to get loans in the future. |
| Repossession | In many states, a lender can repossess a vehicle without a warning or a court order after you have missed a payment. |
| Co-signer impact | If you pay late or default, both your credit and your co-signer's credit could be affected. |
From What should I know before I finalize a car or auto loan? (Ask CFPB), Is it better to pay off the interest or principal on my auto loan? (Ask CFPB), What happens if my car is repossessed? (Ask CFPB) and Why would I need a co-signer for an auto loan? (Ask CFPB), Consumer Financial Protection Bureau, read November 9, 2026.
What to do first
Contact your lender or servicer as soon as possible. The CFPB says to call whoever you make your payments to as soon as you know you cannot make a monthly payment, and ask what options are available.
Get the agreement in writing. To avoid miscommunications, get any new arrangement in writing and ask how it would affect your credit report. If you are told it will not, and it then appears on your reports, the written agreement is evidence you can use to dispute the error with the lender or the credit reporting companies.
From What should I do if I can't make my car payments? (Ask CFPB), read November 9, 2026.
Options to get your auto loan back on track
The CFPB lists these options:
- A payment plan, a new due date or forbearance, if your lender or servicer offers them.
- Refinancing with another lender to get a lower interest rate or spread payments over more time. A longer term may mean lower monthly payments but more interest over the life of the loan.
- Selling the vehicle. Find out how much you owe and the approximate market value; if you owe less than it is worth, you can sell it and use the proceeds to pay off the loan. Check your contract for a prepayment penalty, and ask whether your lender may be willing to buy back the vehicle.
- For a lease, contact your lessor about a payment plan, and check your contract and state law for a right to cure, or make up, a missed payment before repossession.
From What should I do if I can't make my car payments? (Ask CFPB), read November 9, 2026.
Repossession risk
If you cannot make payments and have not worked out an alternative with the lender or servicer, you could be at risk of repossession. The CFPB says that in many states a lender can repossess without warning or a court order after you miss a payment, while other states require a notice that gives you time to make up the missed payments.
You still have rights and protections, and auto loan servicers must make sure every repossession is lawful. If you are an active-duty servicemember, the Servicemembers Civil Relief Act prohibits repossession without a court order for auto loan contracts you entered into before your military service. If your car is repossessed in error, contact your lender or servicer immediately, and if you cannot resolve it, you can submit a complaint or pursue a legal action in court.
From What should I do if I can't make my car payments? (Ask CFPB) and What happens if my car is repossessed? (Ask CFPB), read November 9, 2026.
Financing a used car at Elgin Auto Sales & Service Center
Shopping for your next vehicle? Browse our used inventory, see our financing options, start a finance application, or get a value with our trade-in form.
Our sales department at 1200 E. Chicago St. in Elgin is open Monday to Friday 9 a.m. to 7 p.m. and Saturday 9 a.m. to 6 p.m., and is closed Sunday. Get directions.
Missed car payment FAQ
Is there a grace period on car payments?
It depends on your loan. The CFPB says your loan paperwork shows what counts as an on-time payment and whether there is a grace period.
How much is a late fee on a car payment?
Your loan paperwork and Truth-in-Lending disclosure show the late fees the lender can charge.
Can my car be repossessed after one missed payment?
In many states, the CFPB says, a lender can repossess a vehicle without a warning or a court order after you have missed a payment. Other states require a notice first. Check your contract and your state law.
Will a late car payment hurt my credit?
The CFPB says falling behind on car payments affects your credit and can make future loans harder or more expensive to get. If you have a co-signer, their credit could be affected too.
What should I do if I cannot make my car payment?
Contact your lender or servicer as soon as possible to ask about options such as a payment plan, changing your due date or forbearance, and get any agreement in writing.
What are your sales hours?
Monday to Friday 9 a.m. to 7 p.m. and Saturday 9 a.m. to 6 p.m. We are closed Sunday.
Shopping for your next car?
Visit us at 1200 E. Chicago St. in Elgin.
Sources
Payment, grace period, late fee, credit, repossession and hardship-option guidance are from the Consumer Financial Protection Bureau's Ask CFPB auto loan answers, read November 9, 2026. This is general information, not financial or legal advice. Our address, sales and service hours are from our own website, checked the same day. Photo is of our dealership.
- What should I do if I can't make my car payments? (Ask CFPB), Consumer Financial Protection Bureau, read November 9, 2026
- How do I know who my auto loan lender or servicer is? (Ask CFPB), Consumer Financial Protection Bureau, read November 9, 2026
- What should I know before I finalize a car or auto loan? (Ask CFPB), Consumer Financial Protection Bureau, read November 9, 2026
- Is it better to pay off the interest or principal on my auto loan? (Ask CFPB), Consumer Financial Protection Bureau, read November 9, 2026
- What happens if my car is repossessed? (Ask CFPB), Consumer Financial Protection Bureau, read November 9, 2026
- Why would I need a co-signer for an auto loan? (Ask CFPB), Consumer Financial Protection Bureau, read November 9, 2026
- Home page: address and sales hours, Elgin Auto Sales & Service Center
- Service page: service hours, Elgin Auto Sales & Service Center