With unemployment up, job prospects down, and the cost of everything else on the rise, it is no surprise that carconsumers who once had great credit and no problems meeting bill obligations each month, may now find it difficult to keep their heads above water from month to month.

Since your car loan is probably the second biggest financial decision you make, next to a mortgage, it is really important you do what you can to prevent a default notice and a visit from the repo man. As soon as you know you are headed down the road of not being able to make your car payment during any month, there are some things you can do to prevent a financial disaster.

Contact the Finance Company
Most lenders will work with payment issues on a case by case basis. The worst thing you can do is avoid the lender altogether. Once they have to start calling you looking for money, your credit is headed for trouble. Start by contacting a company supervisor and explain the situation. Be honest about why you can not pay. They have likely heard every excuse in the book but if you are straightforward with them, a mutually beneficial compromise can often be made.

Change the Payment Due Date
If it is a matter of not being able to cover the costs of your car note during a particular time of the month, you can check with the lender and see if you can change the date to one that is easier for you to meet each month. If you can change the due date permanently, ask if the lender would be willing to cut you a break during the month and push back your due date by a week or two until you can catch up and to forgo any late charges you would otherwise incur.

Look to Refinance
If your credit rating is still considered great, you may be able to refinance your original loan. This refinancing deal can extend the current term of the loan and make your new monthly payments lower and more manageable.

Revisit the Original Loan Terms
If you originally took out your car loan for a 36 month term, see if it is possible to extend it to 48 months. This can help lower your monthly payments but will also add additional costs to the overall loan. Lenders may also hit you with a fee for changing the loan terms but it is definitely a better scenario than destroying your credit or losing your car to the repo man.

Defer Your Payments
If you are finding it hard to catch up on paying bills, you may want to consider a deferred payment option. By deferring a payment, you will essentially be allow to skip a payment, which ultimately will be added on to the end of your original loan. By having a month’s jump on paying your loan, you may gain a bit of flexibility.

Inquire About Late Charges
If you are having problems making a payment due to past late charges that have accumulated on your account, ask your lender to waive these fees. Usually, if you can prove that these added charges are making it more financially difficult for you to make on-time payments in full, they will be willing to work with you.