SHOULD I KEEP PAYING MY CAR?

[llecs]

Kudos to Lauren.

Aside from other great suggestions, you can get it refinanced. You can refinance with any bank; it doesn't have to be the bank you are with now. Try a credit union somewhere.

Also rebudget. Cut your expenses. Get rid of cable. Stop eating out. Cut the movies or entertainment. Stop any hobbies. Make changes to your W-4 and state equiv. and have a bigger paycheck. If receiving a refund for your taxes, then apply that to the car. Suspend any investments or savings. Get on a written budget and figure out where you are losing money. If you have a drop in income, you need to cut expenses just as much.

Increase your income. Get a new job. A second or third job. Start your own business. Do something to increase your cash flow. Sell stuff you don't need around the house. Cash in any savings to cover the car. Sell the car. Sell a second car if you have one.

If you do let it get repossessed, it'll kill your score. Voluntary, involuntary or redeemed, all repos are equally bad. Like as mentioned, they will auction the car for a whole lot less than you can sell it for. And for goodness sakes, if you do buy a pre-owned car, pay for it in cash. Don't finance it. Buy a clunker and get things squared away first.

[Anonymous]

If you had a bad loan initially, I am assuming there were credit issues in the past.  If there were, and you have recent 30 day lates, you may not be able to get a refi or get another car loan.  Also, in this credit market, you are highly unlikely to get a car without a down payment (even more so with a recent late on a car note) and you would have to qulaify based upon both the new payment and the old payment...Again, unlikely.  On top of that, you could end up with a judgement from the repo that could end up a garnishment on your paycheck making it problematic to keep up with the newer car payment..

So, no, do no try the bait and switch routine of buying a new car and walking away from your old one.