Missing a car loan payment is stressful, but one missed payment, dealt with quickly, is usually fixable. The key is to act early. Here's what typically happens, and what you can do at each stage.
What happens, step by step
- A few days late: you may be charged a late fee and receive a reminder. Paying quickly usually ends it there.
- More than 14 days late: the lender can report the missed payment in your repayment history on your credit file. Other lenders can see this for two years.
- Ongoing arrears: the lender will contact you and may issue a formal default notice. For regulated consumer loans, this gives you at least 30 days to pay the overdue amount before the lender can repossess.
- Default listing: if an amount of $150 or more is overdue by 60 days or more and the required notices have been given, it can be listed as a default on your credit file. That stays for five years, even once paid.
- Repossession: a last resort after proper notice. For regulated consumer loans, the lender generally needs a court order to repossess if you owe less than $10,000 or 25% of the original loan (whichever is lower). It also can't enter your home, including your garage or yard, to take the car without your consent or a court order. After repossession, you generally have 21 days to get the car back by paying the overdue amount plus costs, or the full amount owing, before it can be sold.
What to do right now
- Call your lender before they call you. Lenders deal with this every day and are far more flexible when you're upfront.
- Ask for financial hardship assistance if your situation has changed, for example through job loss, illness, separation or a disaster. You have a legal right to request a hardship variation, such as reduced payments or a pause. The lender must respond, and a hardship arrangement is recorded differently from a missed payment.
- Get free help. The National Debt Helpline (1800 007 007) offers free, confidential financial counselling.
- If you disagree with how you've been treated, you can complain to the lender and then to the Australian Financial Complaints Authority (AFCA) for free.
Getting your credit back on track
- Set up automatic payments timed just after payday.
- Every on-time payment from here improves your repayment history.
- Check your credit report and dispute anything incorrect.
- If a default is listed, pay it and ask for it to be marked as paid. Future lenders view paid defaults more favourably.
Thinking of refinancing?
If your current repayments simply don't fit anymore, refinancing to a longer term or a cheaper car might help, but only if your credit file is still in reasonable shape. A broker can tell you honestly whether it's realistic.
Wondering if refinancing could help? Tell us about your situation in about 60 seconds and a licensed broker will call you. No credit check to enquire.
Related guides
- What happens if you default on a car loan?
- Car loans after financial hardship or default
- Secured car loans with poor credit
General information only, based on Moneysmart guidance available in September 2026. This isn't legal or financial advice, and rules can differ for business loans. If you're in difficulty, contact your lender and the National Debt Helpline. Finance the Ride is a referral service and doesn't hold an Australian Credit Licence. Last reviewed September 2026.
