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9 Ways To Get Out of a Car Loan

Worried about falling behind on payments? You have options.

By Jenny Cohen , Edited by Chris Kissell

Updated Sept. 1, 2026

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Car loans can be expensive, and they make it challenging to get ahead financially. In some cases, you might even worry about making your monthly payments.

Maybe something has changed in your life, and a loan that was once affordable has become a financial burden.

If your car loan is weighing you down and you want to get out of it, you have some options.

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Pay off the loan

If you simply want to get out of your car loan in the fastest way with the least hassle, pay off the loan entirely.

Of course, you will need a lot of money in savings or will have to earn extra income to pull this off. You'll also need to check the terms of your loan to make sure you will not incur a penalty for paying off the loan early.

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Get another job

A second job or side hustle could be a good option if you need to make some extra cash to pay off your loan.

Look into different options to find out how much you can earn and how quickly you can pay off the loan.

Refinance the loan

Check with your lender — or another lender — to see if refinancing your loan is a good option for you.

Refinancing allows you to keep your car but also change your payment terms to better fit your budget.

If you decide to refinance, make sure you understand the new loan terms, as well as any potential penalties or extra fees you might incur by refinancing.

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Renegotiate your payments

Renegotiating your payments can be another way to lower your monthly costs. Explain to your lender why you are struggling to pay the loan and see if the lender will renegotiate payments.

Lenders may be willing to give you lower payments for several months or allow you to skip payments if they know your financial stress is temporary.

Just remember to ask your lender if it will report any missed payments to the credit-reporting agencies, as this could harm your credit score.

Sell the car

Selling your car is an option to get out of your car loan as long as you're able to sell the vehicle for at least the full amount remaining on the loan.

Of course, if you sell the car, you will no longer have a vehicle to drive. Make sure you're prepared to live without it.

Resort to a voluntary repossession

If you can't afford your car payments, you might want to consider a voluntary repossession. Check with your lender to see if it would consider this option and find out what the consequences would be.

You may end up with a mark on your credit report for seven years, but future lenders might treat a voluntary repossession more kindly than they would an involuntary repossession.

Make Money: 8 things to do if you're barely scraping by financially

Trade in the car

You may be able to trade in your car and get cash back or use the trade-in toward a cheaper vehicle that you can afford.

Before you pursue this option, make sure that the next vehicle you get is within your price range and review the terms of the new loan.

Adjust your budget

If you're struggling to afford your car payment, sit down and re-evaluate your budget.

Perhaps you are overspending and can cut back on purchases so you can better afford your car loan payment.

Default on the loan

Defaulting on your loan is a way to get out of your car loan, but it's not a good option.

A default means your vehicle will be repossessed, so you won't have a vehicle and won't have anything to show for the payments you have made.

Defaulting would also cause a major hit to your credit score. So, while defaulting technically gets you out of the loan, there is almost always a better option that will preserve your financial fitness.

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Bottom line

A car loan can be an expensive monthly bill. If you haven't yet taken out a loan, review your income and expenses before you get a car so you know exactly how much you can afford in terms of a loan.

If you already have a loan and it has become burdensome, look for ways to cut costs so your loan is more affordable. For example, try to save money on car insurance by shopping around to get the best deal on coverage.

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