Being late on a car payment triggers a series of consequences that start with fees and can escalate to credit damage and vehicle repossession. The most immediate effect is a late fee, typically outlined in your loan agreement. After a grace period (usually 10-15 days), the lender will report the late payment to credit bureaus, which can significantly lower your credit score. If the account becomes severely delinquent (often after 90 days), the lender has the legal right to repossess the car.
The impact on your credit score depends on how late the payment is. Credit reporting agencies track payments in 30-day increments. A payment that is 30 days late will hurt your score less than one that is 60, 90, or 120 days late. Each subsequent missed payment deepens the negative mark. Here’s a general overview of the potential impact on a FICO score:
| Days Past Due | Typical Credit Score Impact | Risk of Repossession | Additional Fees |
|---|
| 1-29 Days (Grace Period) | Minimal to none if paid within grace period | Very Low | Late Fee (e.g., $30-$50) |
| 30-59 Days Late | Significant drop (60-110 points possible) | Low | Late fees continue to accrue |
| 60-89 Days Late | Further severe drop | Moderate | Possible reinstatement fees |
| 90+ Days Late | Major, long-lasting damage to credit history | High | Repossession fees, storage fees, auction costs |
The best course of action is proactive communication. Contact your lender immediately if you know you'll be late. Many have hardship programs or may allow you to defer a payment, which can prevent the late payment from being reported to credit agencies. Ignoring the problem is the worst thing you can do, as it accelerates the process toward repossession. Once a car is repossessed, you may still owe a deficiency balance—the difference between what the car sells for at auction and what you owe on the loan, plus all the associated fees.
