9 Ways To Get Out of a Car Loan

Worried about falling behind on payments? You have options.

giving car key to new owner
Updated June 6, 2024
Fact checked

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies.

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.

If you’re over 50, take advantage of massive discounts and financial resources

Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.

How to become a member today:

  • Go here, select your free gift, and click “Join Today”
  • Create your account (important!) by answering a few simple questions
  • Start enjoying your discounts and perks!

Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.

Become an AARP member now

Pay off the loan

88studio/Adobe sales manager giving car keys to woman

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.

Get another job

SB Arts Media/Adobe professional dog walker with dogs on leash

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

bignai/Adobe airport security post

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.

Resolve $10,000 or more of your debt

Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.

National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1

How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.

Try it

Renegotiate your payments

Studio Romantic/Adobe young woman buys a car

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

ALAN/Adobe red old historic 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

Tot La/Wirestock Creators/Adobe tow truck with new car bentley

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.

Trade in the car

KMPZZZ/Adobe sale man giving auto key

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

Kittiphan/Adobe stressed woman checking bills

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

Samuel Perales/Adobe man talking on his cell phone

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.

Earn cash back on everyday purchases with this rare account

Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!2

With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!

This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.

Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.

Apply for a Discover Cashback Checking account today

Bottom line

Zoe/Adobe car parking adobe

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.

  • You could save up to $600 with some companies
  • Compare dozens of providers in under 5 minutes
  • Fast, free and easy way to shop for insurance
  • Quickly find the perfect rate for you

Author Details

Jenny Cohen

Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and FoxSports.com.