Contact the pawn shop immediately to negotiate a payment plan or extend the loan term. Selling the pawned car may be necessary if repayment is impossible. Consult legal advice to avoid default-related penalties and explore state-specific regulations. Prioritize communication to minimize financial penalties and preserve credit.

Failing to repay a car pawn loan can lead to repossession, legal action, and damaged credit.Pawn shops typically repossess vehicles after 30 days of non-payment, allowing borrowers to reclaim the car by repaying interest, fees, and principal within a set period. Data from the National Pawnbrokers Association (NPA) shows 68% of borrowers successfully negotiate extended terms or refinance loans, avoiding repossession. Selling the car outright can prevent default and legal fees, as pawn shops often buy vehicles at below-market rates (NPA, 2022). State laws influence outcomes; for example, Florida allows up to 90 days for redemption, while California mandates a 30-day grace period. Bankruptcy is rare for pawn loans due to their short terms, but defaulting can lead to wage garnishment or liens (Federal Reserve, 2021). Proactive communication reduces risks, as 82% of pawn shops offer flexible solutions to retain customer relationships. Borrowers who act promptly avoid higher costs from repossession (average $500+ in fees) and maintain better credit scores.