Ramification of Returning a Finance Car to the Bank

[Anonymous]

I financed a car from my credit union and thinking about returning it. I have 2 years remaining on the vehicle and rather save the money from the payment every month. I now have a company car which is my primary means of transportation and rarely ever drive my car because its a mid-size sedan and the gas mileage is not that great. I would consider selling it. What is the ramification if I return the vehicle to the finance company?

[Anonymous]

If you return it, that's the same as a repo.

Sell it and pay the note in full.

[Anonymous]

Be careful for a number of reasons.  First, make sure your company car isn't for company use only.  You can get into big trouble if something happens while you are driving and it is not work related as your company is liable.  That is a company by company thing.  That is also why fewer companies do company cars and just do car allowances.  Also, a company car is never guaranteed and you may be forced to rush out and buy something if a job changes or the company changes policies..  

Whatever the situation is, you can't "return" the car.  it is called a voluntary repossesion and you do not want that on your record.  Try to sell it and pay off the loan as stated above if that is what you want to do.  I just caution you.  I know someone who not only lost his job, but ended up in a lawsuit for driving his "company" car over a holiday weekend and he got hit by another car.  The company fired him and then went back and figured out the percentage of the cost and maintenance of the car that he had "used" for personal use and went after him for it as the car had been specifically alotted for company use only.  Apparently they were making an example fo him as a similiar situation had happened before and peole were warned..

[islandchild82]

I agree with the above posters. Additionally, I believe that you would still be responsible for the balance of the loan if the value of the car is less than what you owe. I could be wrong there, but I'm pretty sure that's how it works.

I would definitely attempt to sell it before returning it to the bank and having a repossession on my CRs.

[Anonymous]

Yes, on a repo you are on the hook for the difference between what you owe and what they auction the car for plus fees, etc.

[MattH]

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@Anonymous wrote:

Yes, on a repo you are on the hook for the difference between what you owe and what they auction the car for plus fees, etc.

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And the fees can be rather large, anything they can imagine and they have vast imaginations when it comes to dreaming up fees...

[Anonymous]

Hey thank guys for your response from my previous question. Its been a few months and I'm living a nightmare that I created lol.  I have been trying to sell my vehicle even below book value without any success. Worst part is I did loose my job a few weeks ago due to company cutbacks.  I have other priority in regards to expenses, mortgage and my children's school fees.  I did contact the credit union and they were willing to give me a 1 month extention in regards to payment which is beneficial if I can get a job within the next month. I'm in survival mode and want to downsize. I guess my question is, is there life after a repossession?

[Anonymous]

Yes a reposession on your credit report and you would be responsible for the difference of what they "sell" your car for and how much you owed.

[Anonymous]

as far as life after repo, not if you need a car for anything.  You will not be able to "retunr" your car and then go out and downsize unless you had the cash to purchase outright.  I assume this is not the case or we would not behaving this conversation.  As far as the car goes, You just have to keep fighting until you can either get work, or get it sold.  If you do repo it, any credit cards you have will likely get jacked to the default credit rate, and any credit you try to get in the next few years will be vey expensive.  Good luck.