Finding yourself unable to make car loan or lease payments isn't a good place to be. But there are ways to resolve the situation.

Your car loan or lease payment is busting your budget every single month and you just can’t take it anymore.

You want out. What should you do?

Yes, you’ve put yourself in a difficult financial situation, but there are ways out.

Redo the deal

One strategy for cash-strapped auto borrowers is to negotiate a new payment plan with your lender.

Take a close look at your finances and estimate what kind of monthly payment you will be able to stick to for the duration of your loan. Next, arrange a meeting with your lender.

“Have a proposition other than, ‘I can’t make my payment,’” says Steve Rhode, president of, a financial crisis and treatment center. “You want to be able to provide proof of what you can do.”

It’s best to negotiate a new payment plan before you get behind on your loan. If you wait until after your payments are late you may not have a vehicle to drive.

Selling your car

If you’re prepared to give up the car, you may want to consider turning your loan and car over to a friend or family member. The new owner will have to be approved by your lender.

“Certainly it would be fine as long as it’s OK with the creditor,” says Sheldon, a principal author of “Surviving Debt: A Guide for Consumers.”
“The creditor might not agree to it. It’s up to the creditor, it’s not up to you.”

Another strategy is selling the car on your own. Because you don’t own the car outright, you’ll need to get permission from your creditor first.

A dead end

You should consider turning your car over to your creditor as your absolute last resort. The only way to make this unfortunate situation more bearable is to negotiate.

Ask your lender if by turning over your car voluntarily you could be cleared of your loan obligation. Be sure to get any kind of compromise in writing. You might also want to request that your creditor not report your inability to pay your original loan to the credit bureaus.

Breaking a lease hurts

Thinking about ending a lease early? Think again.

The costs of ending a lease early are so steep that you should do everything you possibly can to make your scheduled payments through the end of your leasing term.

Are there other places in your monthly budget where you can free up some more cash? If so, do it. Do whatever it takes to free up enough money to make that leasing payment.