For many of us, our vehicles are our tickets to freedom and something we rely on for groceries, picking up kids from school, and the other routines of daily life. So protecting our cars becomes extremely important during a time of unemployment. Thankfully there are several ways to ensure your car payment stays current and you stay on the road.
Find the money in other places
Collecting unemployment benefits may be the easiest way to make sure your car note gets paid. Signing up for unemployment can be difficult, but it can get you the money you need not only for your car, but other areas of your life. Be sure to create a strict budget that prioritizes the most important aspects of your life and come up with a plan for meeting your big bills. If you are truly struggling, reach out to your loan holder and explain the situation to them. Since the recession, some companies are taking more flexible stances on someone’s inability to pay, and you may be able to work out a payment plan.
Payment protection insurance
Perhaps the simplest way to safeguard your car payments is to purchase payment protection insurance through your insurance agency or the dealership where you bought your car. Payment protection insurance pays a portion or all of your car payment should you lose your job. The policies can often be bundled with your overall loan and paid at the same time. The insurance can be added on at the point of purchase, or you can gain coverage later by contacting your provider. To prevent people from buying insurance the day before they get laid off, most policies require a specific waiting period before you can begin collecting. So if you’re worried about your future, it may be better to sign up sooner than later.
New car protections
Depending on the manufacturer and your specific financial situation, some car companies are including various forms of job loss protection when you buy a new car. Companies like Hyundai have offered equity protection should you lose your job and have to return a new car. Basically, if you return a car that is now worth less than what you owe, the financing will pay off the balance of the loan. Such protections almost always require you to finance through the dealer, which can offer different rates and guarantees than you might find with an outside company. But if you are financing through the dealer, make sure that protection is included in the final agreement.
Below you will find additional information and resources on car payment options:
Summary of car payment protection insurance
Options for making your car payments