What Happens if I Miss a Car Payment in Canada?

Posted by on Jan 30, 2024 - Archived under Uncategorized

Missing any payment is not something we would recommend but isn’t the end of the world. What’s most important is what you do next. This is something we see often. Life is busy, we all have a lot going on and it’s very easy to miss something like this.


We asked our auto loans team to outline the steps you should take if you miss a car payment. Act fast and you may be able to rescue the situation.


Missed a Car Payment

To be blunt, missing an auto loan payment is a big deal and it isn’t something we would ever recommend someone doing.


That said, it isn’t the end of the world and as long as you act quickly, you can rescue the situation.

When you miss a payment, your lender will usually notify you. They will call, email or write to you with a reminder.


what happens if you miss more than one car payment


If you pay quickly, either through remembering yourself or using as reminder, no further action is usually taken.


If you notice you have missed a payment, phone the lender immediately and make the payment. Explain what happened and why and what you’re doing to prevent it happening again.


Do that and you may get a pass. That time.


Depending on how long you leave it, that missed payment may not even be noted on your credit report. That isn’t always the case though and certainly won’t be if this is part of a pattern.


Miss one payment and repay quickly, and it’s likely the lender won’t mark it as a late payment.


Miss more than one or miss occasional payments and you likely won’t get away with it again.


Missing More Than One Auto Loan Payment

Lenders get that life is busy and there’s a lot going on but they won’t get that you don’t seem to want to fulfil your obligations.


Miss more than that and they will begin sending letters. You’ll likely get a polite reminder first. A payment reminder that you missed a car payment.


If you don’t pay or respond, the second letter will likely be an arrears notice. This is a formal letter and where things can potentially get a lot more serious.


If you get this letter, you can be sure that the lender has marked the payment as late or missed on your credit report.


You’ll see a serious drop in your credit score and any future lender will look very carefully at any application.



Depending on the lender, they can do one of two things. Keep sending arrears notices until you have settled up or send a default notice.

A default notice gives you a set period of time 14-28 days to clear all your arrears and get the auto loan up to date.


Failure to do so can result in the lender terminating the agreement and taking further action to responses the car.


This is obviously a position of last resort but lenders will take these steps if they need to.


If you’re having trouble making payments, talk to your lender about it. There is a lot they can do to help and may be able to restructure the loan or do something else to help.


For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!

Dixie Auto Loans