Letting a car go...

I'm thinking of letting a car go... how many years does it take to clear off my record? Do I have to pay anything once I let the car go? Cant afford it and just looking at diff options. Thank you guys for your help.

 

I believe it will stay on your credit record for 7 years and the bank might come after you for the balance of whatever they sell the car for.

 

If you can't afford it, how about selling it? Are you talking about your truck or is this another car you have?

 

It will be at least 7 years and you can count on your insurance rate, credit card rates and a lot of other debt to go up in interest rate. I'd think long and hard, (I'm sure you have) before letting it go back. They will come after you for the difference between the price they get vs what you owe. I used to repo cars and you would better off just giving it back rather than let it go to repo since that adds a shit load of cost to the bill for repo fees, storage and other crap.
Good luck and it sucks that you are in that situation.

 

@ Brian: I Am letting my 06 4runner go, I still owe about $26000 and dont think its worth that much.

@ Scott: What happends when you give it back? how does it work.

 

Scott, im also financing through a Bank not the Dealer. if i take it back to the Dealer will they take care of the bank?

 

no matter what happens you are responsible for the balance of the vehicle...i think itll stay on your record forever???? if you dont pay it off

 

It won't be on your record forever. 7 years for a repo is about right. As said before, you are much better off taking it back to the dealership and trading it back in or selling it on the used market for what you can get and making arrangements to pay the balance off.

You can likely work out some reduced payments for the balance. Something like 150 a month for 24 months or something.

 

You are better off working with the bank to see if they will lower the payment. If they will not work with you I would recommend giving it back to the bank which is considered a "voluntary surrender". If you voluntarily surrender the vehicle they legally cannot charge you a repossession fee or storage fees.

Once you give the vehicle back you will have a 15 day redemption period which means you can pay "up to date" on the account and get the vehicle back if you change your mind. After the 15 days have expired and you don't redeem the vehicle, it will then be sold at auction. Once the vehicle is sold and is sold for less than you owe, you then become responsible for the deficiency balance which they can sue you for if you don't agree to payments.

I deal with this everyday as I work for a finance company and process repossessions and audit them almost everyday. There are some more minor details but this is the brunt of it.

A repossession, voluntary or involuntary can stay on your credit report 8 years or more.

 

Very informative. I agree about selling it for what you can, then paying off the balance, it will cheaper in the long run. Most credit companies can and will raise your rate to the maximum because they could consider you "high risk", and banks are very wary of reposessions of autos. 26,000 though, the 4runner is probably worth about 19 or 20, that's pretty rough.

 

sell it to someone to take over ur payments!!! ppl do that all the time...just list it as Take Over Payments instead of an actual price

 

So much to think about... i would rather take the rout that wont hurt me in the long run.

 

The dealer won't want it back unless it 's to sell you a new one. Call the bank and try to work it out with them. They don't want it back either but they technically own it.

When you turn back over to the bank they take the car and sell it, probably wholesale. And they will charge you for the difference. They won't sell it for anything near what a private party would pay for it. You may be able to negotiate a signature loan (Loan unsecured by an asset) for the balance.

Good luck.

 

I had to do this many years ago. If you are not behind on the payments, then the bank will most likely want to work with you to get the payment down, as they would rather not deal with liquidating the asset. If they do take it back, it will show on your credit as a voluntary reposession, and you will be held accountable for the balance of the loan after the vehicle is sold. It will have a significant negative impact on your credit score, and as has been said, will be there for 7 years.

Something that you might want to talk to the bank about would be to arrange a "short sale" where you sell the car outright for as much as you can get out of it, and then make payments on the balance as a signature loan. This should in effect reduce your payment, and protect your credit.

 

How much do you owe on your truck if you owe anything? Maybe you could sell the truck and the 4runner, pay off the loan(s) and buy something more affordable

 

^^ the truck is paid off, I am thinking that selling the truck and keeping the 4runner is the best way to go. I wanted to let the 4runner go because the monthly payment is about 600 and i thought i could just save the money so i could go back to school but now i see its not the right choice. Thanks guys.

 

Selling, even at a loss, always makes more sense than letting it wreck your credit. Think of it this way...you owe 26,000 and may only be able to sell the vehicle for say...20 grand...but that's 20 grand worth of payments in your account, which buys you TIME to come up with the remainder of the loan balance (in this case, given a 600ish monthly payment, about 3 years) and keeps your credit intact.

Your harshest penalty in that case is paying a few grand extra for a costly learning experience about not getting in over your head on loans. See? You went back to school after all!

 

^^^this is probably the best idea. You could sell the taco and use the money from that to refi the 4runner with a huge downpayment (money from the taco) and get your runner payment down to the 200-300$ range

 

$600!!! how are your payments so high? high interest?

 

Yea man you don't want to mess around with your credit especially if you're young. As someone's already mentioned...take the Taco money and throw that chunk into your 4Runner and refi at lower interest rate if you can.

And then with the money you free up you can buy more mods for the 4Runner. jk Or set it aside for other bills/student loans.