How do I get out of a car loan I can’t afford?

Start with the least drastic step and work down the list: talk to your lender before you fall behind, then look at selling, trading down or refinancing, and treat giving the car back as a last resort, because you can still owe money afterward. If you owe more than the car is worth, having someone take over the payments under a written agreement is another path worth a look. Below is the ladder, step by step, with the trade-offs of each.

You’re not alone

Car payments have become one of the heaviest bills in a lot of Texas households, and that isn’t a personal failure. The New York Fed reported that Americans owed $1.71 trillion on auto loans in the second quarter of 2026, and about 3% of auto loan balances (at an annual rate) were moving into serious delinquency. Edmunds found that a record 21.2% of new-car buyers took on payments of $1,000 a month or more in the third quarter of 2026. The Federal Trade Commission’s plain-English advice for people in this spot is simple: contact your lender now, before things get worse. That’s exactly where the ladder starts.

The ladder: your options, from least to most drastic

1. Call your lender before you miss a paymentThe CFPB suggests asking about a payment plan, a changed due date or forbearance (a temporary pause), getting any agreement in writing, and asking how it would show on your credit report. The FTC adds that many lenders will work with you if they expect you to pay soon. This doesn’t get you out of the loan, but it can buy time to choose the next step calmly.
2. Sell the car if it’s worth more than you oweAsk your lender for the payoff amount, then compare it with what the car would actually sell for. If the sale covers the payoff, the loan is paid, the lien is released and you’re out. The CFPB also suggests checking your contract for any prepayment penalty first.
3. Trade down, carefullyTrading for a cheaper car can lower the payment, but if you owe more than your car is worth, the difference often gets rolled into the next loan. Edmunds reported that the average payment on new-car loans with negative equity on the trade-in reached $944 a month in the second quarter of 2026. Ask to see the full numbers, not just the monthly payment.
4. Refinance with another lenderA refinance replaces your loan with a new one. The FTC and CFPB both point out that a lower rate or longer term can make payments easier, but a longer loan can raise the total you pay. The FTC also warns to watch out for auto loan modification scams.
5. Have someone take over the paymentsIf you owe more than the car is worth and can’t sell or trade without bringing cash, a take-over may be worth looking at. A handshake deal leaves the loan in your name, so look for a written agreement that spells out who pays what. ReDrive’s Take Over Payments program was built for this situation.
6. Voluntary surrender, as a last resortGiving the car back may sound like a clean break, but it usually isn’t. The FTC explains that with a voluntary repossession you might pay less in fees, yet you’re still responsible for the difference between what you owed and what the car sells for, and it can still appear on your credit report. Our honest look at whether to just let them take the car goes deeper.

Why skipping steps can cost more

When a payment is crushing you, it’s tempting to jump straight to the end: stop paying, give the car back, or roll everything into a new loan just to make the stress stop. But every step down the ladder usually carries more cost or more credit damage. The CFPB’s research found that loans carrying negative equity from a trade-in were more than twice as likely to be assigned to repossession within two years as loans with positive equity. Taking an hour to gather your numbers and call your lender first keeps more options open.

The goal isn’t to escape the payment tomorrow. It’s to pick the exit that leaves you in the best shape a year from now.

Refinance, buyout or take-over: what’s the difference?

People in this spot search for “refinance my car loan,” “car loan buyout” and “someone take over my car payments.” A refinance is a new loan, usually still in your name, that pays off the old one. A buyout means someone pays off your current lender directly and you move on under a new written agreement or a sale. A take-over means someone else takes on the payments, ideally with your lender’s approval or under a written agreement. If you also have a title loan on another vehicle, our title loan refinance & buyout guide explains how that side works.

Where ReDrive fits

If you’ve worked down the ladder and the numbers still don’t work, especially because you owe more than the car is worth, ReDrive can look at taking over the payments on an unaffordable car loan. Our team in Plano, TX works with drivers across Dallas-Fort Worth and Texas. You tell us about your loan and your car, we review your situation, and you get your options in writing, with no obligation. If it’s a fit, you work with ReDrive under a written agreement that explains everything before you sign. Bring your loan statement and payoff amount, and see what options you may have with ReDrive.

Quick answers

What is the first thing to do if I can’t afford my car payment?

Call your lender before you miss a payment. The CFPB suggests asking about a payment plan, a changed due date or forbearance, getting any agreement in writing, and asking how it will show on your credit report. Early contact usually leaves you more options than waiting.

Does voluntary surrender get me out of my car loan?

Not completely. The FTC explains that a voluntary repossession may mean paying less in fees, but you are still responsible for the difference between what you owed and what the car sells for, and it can still appear on your credit report. It’s usually best treated as a last resort.

Should I refinance my car loan or look for a buyout or take-over?

It depends on your numbers. A refinance is a new loan that can lower the payment with a lower rate or longer term, though a longer term can raise the total cost. If you owe more than the car is worth, a buyout or a take-over under a written agreement may be worth comparing. Look at the total cost, not just the monthly payment.

What if I owe more on the car than it’s worth?

Selling or trading in won’t fully pay off the loan, so you would need to cover the difference or roll it into a new loan. That’s the situation ReDrive’s Take Over Payments program was built for: you share your loan details and get your options in writing, with no obligation.

This article is general information, not financial or legal advice. Programs, rates, and eligibility vary by lender and change over time. Always confirm the full terms in writing before you sign anything.