Car payments are usually the second largest payment a person makes per month, after their rent or mortgage. In troubled economic times, many find it hard to make the payments on their cars. There are several options on things to do if you no longer want to make payments on a car note, but it all boils down to whether you want to keep the car or not.
If You Want to Keep the Car
The only way to get out of making payments for the car and to keep it is to pay the loan off in full. The bank does not care where the money comes from to pay off the loan--a friend, family member, home equity loan, and so on. Until the car is paid off and the title is sent to you, you are on the hook to them for payments. Even making significant payments toward the principal will not place payments on hold for a while; it just shortens the term of the loan.
If You Are Leasing the Car
If you let the car go, there are more options for getting out of your payments. If you have a lease, look into a lease exchange program. These are programs that connect people who are looking to get out of a lease with those that are looking to assume one. The person assuming the lease will have to qualify for the lease and it has to be approved by the leasing company. You could also find out the payoff figure from your lender and sell the car. If you owe more than what the car is worth, then you will be expected to pay the difference. The lender may be willing to make payment arrangements for the balance, or you may get it from another source.
If You Are Financing Ownership of the Car
If you are financing the car, you can also sell the car. You can then buy a less expensive car, if you owe less than what you sell the car for. If you owe more than what you can sell the car for, you have two options. You can sell the car and either pay the lender the balance, or you can ask the lender to agree to a short sale. This is when the lender agrees to take less than what is owed on the car in order to avoid the fees and hassle involved with repossession. Once the title changes hands, the balance of the loan is due in full, so you cannot have someone assume the title and the payments, like subletting an apartment.
If you do not want to make payments, the only other option is repossession, whether voluntary or involuntary. Both are equally damaging to your credit and can keep you from being able to qualify for a mortgage, car loan or credit card for up to seven years. In repossession, the car is sold at auction and you are responsible for the balance between what the car sold for and the loan amount plus fees. That means you will be paying for a car you no longer own and have trashed credit along with it. The only benefit to voluntarily turning in the car is that you avoid being responsible for the fee to the repo agency.
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