I have recently come upon bad times and can no longer afford my car. Can I return it to the bank? Will I be responsible for any costs? It's my understanding that they sell the car then I have to pay the balance? To me that sounds funny because if I could pay the balance I would keep the car. Any advise?
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voluntary repo
- Thread Starter teresa8
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I am lost as well
Me and My husband were suckered into buying a 2002 Mitsubishi Montero Sport. Dont get me wrong it is a nice vehicle. But we have come to a slump in finances right now, so went to trade it in for an older vehicle for a lower payment.
Well, we still owe $27,000 on it and the dealer told us we would be lucky to get $16,000 for it, which would leave us with a balance of $11,000.
There is no way we could or even WANT to add that to another vehicle loan, and I dont even think we would be able to sell it ourselves for that amount. Even if we went and tried to sell it for say $23,000, we dont have that extra money to pay off the rest.
We have good credit but if we continue with this car payment for 4 more years of $549.00 it may go to negative credit. Any suggestions from anyone would be greatly appreciated.
Thanks
Angela
Me and My husband were suckered into buying a 2002 Mitsubishi Montero Sport. Dont get me wrong it is a nice vehicle. But we have come to a slump in finances right now, so went to trade it in for an older vehicle for a lower payment.
Well, we still owe $27,000 on it and the dealer told us we would be lucky to get $16,000 for it, which would leave us with a balance of $11,000.
There is no way we could or even WANT to add that to another vehicle loan, and I dont even think we would be able to sell it ourselves for that amount. Even if we went and tried to sell it for say $23,000, we dont have that extra money to pay off the rest.
We have good credit but if we continue with this car payment for 4 more years of $549.00 it may go to negative credit. Any suggestions from anyone would be greatly appreciated.
Thanks
Angela
Re: I am lost as well
Of course you can't return the car to a bank... do they lend cars or money?
You borrow money from the bank to purchase a car. If you cannot afford the car you must sell it and then pay the bank. People borrow money all the time and secure it with the item bought, e.g. property. If you don't pay the bank will foreclose on the property -- and can also go after your other accounts and some personal property too if you ignore any balance remaining.
For example, if you took out a $10,000 loan for a car and you decided you couldn't afford the payments a year later after you paid $1,000, here is what would happen. You would owe $9,000 at that point. The car might be worth 60% of what it was new, especially since it is used. If the bank is forced to repossess it, it will take the car and sell it. On the market the bank doesn't make the same effort you will since you have an interest in absolutely getting as much as possible for the car. They only get 50% of the value at the auction or $5,000. This means that you owe $4,000 still... but wait. The bank will charge you for taking the car AND for selling it at auction since it isn't their job to dispose of the car for you and they aren't car dealers... that will be $1,000 in expenses so you now owe $5,000 which you will have to find a way to pay back.
Note that this will probably represent the typical situation since, unless you have paid back a significant amount on the car, the car might be worth less than the amount due -- and if it is sold by the bank you will very likely have an oustanding balance remaining that you must pay because the bank loaned you the full $10,000 to buy the new car!
I hope this makes things a little clearer...
If you have other assets you may need/want to sell them or use them as security to take out a second loan. A financial advisor might be a better person to talk to, especially with regard to what you may have. Do you have any reserve savings? You may be reluctant to give it up but this is the time you may need to use it. I know it's not an answer you want to hear but that is the reality. I wish you the best of luck in your situation...
Of course you can't return the car to a bank... do they lend cars or money?
You borrow money from the bank to purchase a car. If you cannot afford the car you must sell it and then pay the bank. People borrow money all the time and secure it with the item bought, e.g. property. If you don't pay the bank will foreclose on the property -- and can also go after your other accounts and some personal property too if you ignore any balance remaining.For example, if you took out a $10,000 loan for a car and you decided you couldn't afford the payments a year later after you paid $1,000, here is what would happen. You would owe $9,000 at that point. The car might be worth 60% of what it was new, especially since it is used. If the bank is forced to repossess it, it will take the car and sell it. On the market the bank doesn't make the same effort you will since you have an interest in absolutely getting as much as possible for the car. They only get 50% of the value at the auction or $5,000. This means that you owe $4,000 still... but wait. The bank will charge you for taking the car AND for selling it at auction since it isn't their job to dispose of the car for you and they aren't car dealers... that will be $1,000 in expenses so you now owe $5,000 which you will have to find a way to pay back.
Note that this will probably represent the typical situation since, unless you have paid back a significant amount on the car, the car might be worth less than the amount due -- and if it is sold by the bank you will very likely have an oustanding balance remaining that you must pay because the bank loaned you the full $10,000 to buy the new car!
I hope this makes things a little clearer...
This is really another question of finances. If one may have a difficult time paying for a vehicle or anything else for that matter, it is probably not a good idea to buy. It seems that this situation was unexpected, unfortunately, and I'm sorry that this seems to have happened to you. There is no law that states that if you cannot afford a payment that the bank has to be the one to bear the brunt of the loss.
If you have other assets you may need/want to sell them or use them as security to take out a second loan. A financial advisor might be a better person to talk to, especially with regard to what you may have. Do you have any reserve savings? You may be reluctant to give it up but this is the time you may need to use it. I know it's not an answer you want to hear but that is the reality. I wish you the best of luck in your situation...
darkmatrix84
New Member
voluntary repo or selling the car
What if you call the bank lets say the kelly blue book is worth 11,500k. Lets say a 2002 dodge quad cab. And the person who got out the loan to buy the car can't afford to pay it off. The person has 22k with finances left to pay or if he wants to pay it, right of the bat it would be 18k. So you call the bank who issued the load and they say to go to car max and try to sell it for 12-13k and then you can settle on the rest. So you do as your told you go to car max and they give you an offer of 12k. so you report it to the bank and this is what they offered blah blah blah. Now the bank says that not what we told you and we have to record of that conversation. Now the bank is saying they want 14k minimum to settle and thats 80% percent of the balance if you where to pay it right off which is the 18k. Now how in the world are you going to get someone to pay 14k for for one to settle with the bank. Any advise here...??
What if you call the bank lets say the kelly blue book is worth 11,500k. Lets say a 2002 dodge quad cab. And the person who got out the loan to buy the car can't afford to pay it off. The person has 22k with finances left to pay or if he wants to pay it, right of the bat it would be 18k. So you call the bank who issued the load and they say to go to car max and try to sell it for 12-13k and then you can settle on the rest. So you do as your told you go to car max and they give you an offer of 12k. so you report it to the bank and this is what they offered blah blah blah. Now the bank says that not what we told you and we have to record of that conversation. Now the bank is saying they want 14k minimum to settle and thats 80% percent of the balance if you where to pay it right off which is the 18k. Now how in the world are you going to get someone to pay 14k for for one to settle with the bank. Any advise here...??
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