You are absolutely correct not to allow the repossession. That is horrible advice that would drag on your wife's credit for the next seven years. It's not easy to drag yourself out of a bad situation like this. It sounds like you carried negative equity from the original vehicle into this one and with the horrible interest rate have been buried by it since. The good news is that you should be starting to see the most of your payments going to principal now instead of interest. Twenty months is a long time but it is not forever.
Before you do the same thing to yourself again you need to decide if it would not be better to just continue with whatever repairs are necessary on this vehicle to get to the end point (and hopefully beyond that). Is it possible to minimize the use you put on the Sienna and use your car most of the time? Are you able to start putting some money in the bank toward a future down payment on a replacement vehicle? If you have to get rid of the Sienna can you sell it to a private party and cover the balance due to get clear title for transfer? You will almost always get more if you sell it yourself. And remember all parts of a car deal are negotiable including the trade in value.
If you rush into another car deal and carry more negative equity you are just setting yourself up for more of the same, especially if your credit scores are poor and you end up with high interest financing again. To rebuild credit just read a lot of the experience and advice in these forums and follow it. You will put yourself and your family in a much better place if you can just hang in there and improve your credit situation and negative equity situation before your next purchase.
Starting Score: 500'sIt's always easier to deal with the situation when you have a longer term (and bigger) goal in mind. Good luck.
