Voluntary Car Repo

[ka7799]

I am hoping someone can advise me on voluntary car repossession. I am considering to turn in my car because I feel like there is no other way to get rid of it. I cannot afford it any more. My credit was kind of bad when I purchased it and I got a high interest of 15%. Currently I have $11,000 to pay off and the car is 5 yrs old and has 107,000 miles. Even when I would want to sell it there is no way anybody will purchase it for $11,000. I don't know what else to do with it and I am thinking about turning it in.
I have been hearing that if I agree to the voluntary repossession I might not have to pay off the deficiency balance. Is this true?
Any comments are greatly appreciated it.

 

[meahmiller]

this is just my experience. i have voluntarily turned in 2 cars and 1 4 wheeler in my life so far. you will have to sign a paper saying that you are surrendering the car. it will be put in storage for at least 2 weeks. you will be charged for storage, cleaning(no matter how clean it is), and misc other fees. your car will then be sold at auction. this money will be applied to the balance that you owe on the vehicle. most likely they won't get much for the car. 1-2 thousand dollars. you will now owe the balance on the loan. you will have to pay back what is still owed. it depends on your contract if you will have to still pay interest while paying on this balance. i persoanlly have not had to pay interest but one of my friends does. so you will have to pay either what you owe now or turn it in and pay other crazy fees added on.

sorry i don't have better news. you are pretty much stuck with the bill even if you give it back.

i had a 1 year old geo prism i owed 8k on it they sold it and after all the fees i owed 5k. if i would have known that i would have kept the car and at least had something crappy to show for the money i was paying out each month. it really sucks when you have to pay a bill and have nothing to show for it.

 

[jalancast]

First, I'm not an attorney. I did, however, work in the car business for a few years and I've been through this before.

I'm having a little trouble comprehending how you owe $11k on a vehicle with 107k miles. Did you roll negative equity into the new loan? All I can figure is that you're driving an SUV or a luxury vehicle.

In any case, there's nothing good about a voluntary repo. My advice would be to avoid a repossession at all costs. First, there's the fact that you're probably going to be responsible for some or all of the $11k when you surrender your vehicle.

Second, in light of the credit crunch, there's a good likelihood that you won't be able to get another car loan for a while (5-10 years) if you repo. You will destroy your credit in other ways too - no house, no credit cards (at least not for a while), etc. It used to be that you could have a repo and get a car again in as little as 18 months but those days are probably gone forever.

If there's any chance you can stick it out, if you can still afford the payment and the car still runs, keep it. Send extra money, pay the car off as fast as you can, and move on from there.

Finally, if you owe this money to a buy-here-pay-here finance company, make sure that they're reporting to the credit bureaus. If not, drop it off and wave goodbye. If they haven't reported any payments up to this point, they're probably not going to report a repo either. Again, this applies ONLY to a buy-here-pay-here that's not reporting.

Good luck.