What Happens If You Miss an Auto Loan Payment?
Missing an auto loan payment can trigger a series of serious financial consequences some immediate, others long-term. Whether your payment is just a few days late or more than a month overdue, it’s critical to understand what happens next and how to protect your credit (and your car).
This guide walks through the full timeline of what to expect, how late payments affect your credit score, and what you can do to fix the situation before it spirals.
Grace Periods: How Late Is “Late”?
Most auto lenders offer a grace period usually between 7 to 15 days after your due date. During this window, you can make a payment without facing penalties like late fees or credit damage.
But the exact terms vary by lender. Check your loan agreement or call your lender directly to confirm your specific grace period.
Important: A payment that’s just 1–2 days late usually won’t be reported to credit bureaus or cause repossession but late fees may still apply.
The Late Payment Timeline: What Happens When
Here’s how the consequences stack up over time:
Day 1–15: Grace Period
- No credit impact yet
- Possible late fee (depending on lender)
- Best time to catch up without lasting damage
Day 16–29: Account Becomes Delinquent
- Late fees apply
- Lender may call or email you
- Still not reported to credit bureaus
Day 30: Officially Late
- Lender reports to credit bureaus
- Your credit score can drop 50–100+ points
- Late payment stays on your report for 7 years
Day 60–89: Second Missed Payment
- Score damage deepens
- Loan may be sent to internal collections
- Risk of repossession increases
Day 90+: Default and Repossession
- Car may be repossessed without warning
- Debt could be turned over to a third-party collection agency
- Legal action may follow
- Repossession stays on your credit report for 7 years
How Late Payments Affect Your Credit Score
Payment history makes up 35% of your FICO score, so a single missed car payment can cause a serious hit especially if your credit was strong before.
Credit scoring models typically separate:
- 30 days late
- 60 days late
- 90+ days late
Each tier causes progressively more damage.
Example:
A borrower with a 720 score could drop to below 640 after one 30-day late payment, which could mean significantly higher rates on future loans or credit cards.
How to Recover from a Missed Car Payment
If you’ve missed a payment or know one is coming take action right away. The earlier you address it, the more options you have.
1. Contact Your Lender Immediately
Explain your situation. Many lenders offer:
- Temporary payment deferral or forbearance
- Payment plan restructuring
- Due date changes
Honest communication shows you’re proactive, which may help preserve your account and credit standing.
2. Request a One-Time Forgiveness
If you’ve never missed a payment before, ask if your lender can waive the late fee or agree not to report it to credit bureaus. Some lenders allow one-time courtesy waivers for long-time borrowers in good standing.
3. Make the Payment ASAP
Even if it’s already late, paying before 30 days prevents credit damage. The later it gets, the harder it is to recover.
4. Set Up Autopay or Reminders
Going forward, use:
- Automatic payments to prevent future misses
- Budget alerts or due date calendars
- Changing the due date to align with your payday
Can You Remove a Late Auto Payment from Your Credit Report?
Possibly — here’s how:
- Goodwill Letter: Write to the lender asking for removal of the negative mark, especially if it was a rare mistake.
- Dispute Errors: If the late payment was incorrectly reported, file a dispute with the credit bureau.
- Wait It Out: Late payments fall off your credit report after 7 years.
Can You Lose Your Car After Just One Missed Payment?
Technically, yes — but it’s rare.
Repossession laws vary by state, but most lenders won’t seize your vehicle after one missed payment. However, they can if your loan contract allows it. Usually, repossession happens after 60–90 days of nonpayment, and you’ll often receive notice before action is taken.
Still, it’s not worth the risk. Always communicate with your lender to avoid worst-case scenarios.
Final Thoughts
Missing an auto loan payment can quickly spiral into financial damage but you have more control than you think. Act fast, stay in contact with your lender, and take steps to prevent future missed payments.
The earlier you take charge, the more you can protect your credit and your car.
Next up: Curious about mortgage payments and credit? Learn exactly when home loan delinquencies start hurting your score in Mortgage Late Payments: How Many Days Before It Hurts Your Credit?
