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Regular Contributor
Viper786
Posts: 190
Registered: ‎04-15-2011
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Voluntary surrender of car

I'm not sure if this is the right section, but I am posting this again on behalf of a family member. He financed a car at the end of 2007 on a 72 month finance which would run through december of 2013. He can no longer afford to make payments on this car and is already 2-3 months behind and is getting calls from the finance company almost everyday. He has 4.5 years of payments made on that and 1.5 years left of payments but he no longer wants to keep this car. The car has some body damage, worn out tires, worn out brakes, and is most likely worth less than the balance he owes.

 

Is his best option to do a voluntary surrender where he calls the finance company and says he can no longer make payments and to take the car back?

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pizzadude
Posts: 9,674
Registered: ‎01-28-2010
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Re: Voluntary surrender of car


Viper786 wrote:

I'm not sure if this is the right section, but I am posting this again on behalf of a family member. He financed a car at the end of 2007 on a 72 month finance which would run through december of 2013. He can no longer afford to make payments on this car and is already 2-3 months behind and is getting calls from the finance company almost everyday. He has 4.5 years of payments made on that and 1.5 years left of payments but he no longer wants to keep this car. The car has some body damage, worn out tires, worn out brakes, and is most likely worth less than the balance he owes.

 

Is his best option to do a voluntary surrender where he calls the finance company and says he can no longer make payments and to take the car back?


Is there anyway that he can limp to the finish line with this car ??  If he gives the car back it will bascially be a repo, and he will still be liable for paying the loan balance, plus interest, fees, etc...   It's not like he can get out of paying by giving them the car.    How much does he owe on the car ?

 

If he did give the car back....What is he planning on driving ?   Trying to get approved with a recent repo on his reports will be a nightmare....

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
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kikibloom
Posts: 10
Registered: ‎06-07-2012
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Re: Voluntary surrender of car


Viper786 wrote:

I'm not sure if this is the right section, but I am posting this again on behalf of a family member. He financed a car at the end of 2007 on a 72 month finance which would run through December of 2013. He can no longer afford to make payments on this car and is already 2-3 months behind and is getting calls from the finance company almost everyday. He has 4.5 years of payments made on that and 1.5 years left of payments but he no longer wants to keep this car. The car has some body damage, worn out tires, worn out brakes, and is most likely worth less than the balance he owes.

 

Is his best option to do a voluntary surrender where he calls the finance company and says he can no longer make payments and to take the car back?


Hello,

 

I must say I agree with Pizzadude, it's going to be a repo no matter how you slice it... I have a Chevy that's basically salvaged - however the dealership sold it to me anyway and it was my fault for not being a smart consumer and pulling a car fax on the vehicle. I was in desperate need of a car and my credit was horrid. I recently brought a new car and I refused to use the Chevy as a trade in and I can't even get that thing to pass inspection no matter how much money I dumped into it. So, I asked around about options and because I only have to years left I decided to just "limp into the finish line" as Pizza dude put it. It did help that my uncle gave me $3,500k towards the car. So now I just have to pay back $2k and my uncle has given me 3years to pay him back AFTER I pay off the Chevy.

 

Is there anyone he could borrow the cash from? I know that's a ridiculous question in this economy, but it wouldn't hurt to send out a mass email to family and friends explaining his situation, that's what I did. Also maybe he could sign some sort of promissory note with someone who needs a car and could possibly afford the payments? That way they could drive the car, pay for it and when the title comes, he just turns it over to them if they pay the difference that he paid, sort of like a lease? However, a repo shows up as a repo no matter if it's voluntary or involuntary. Trust me I know, got my first car at 19 and I 22 decided I didn't want to drive a Dodge Neon anymore and instead of consulting my parents, I listened to Chrysler and just surrendered my car... Repo city right on my credit report! I had to wait 71/2 years before that thing fell off, and of course my mom was pissed - she co-signed. It took me 10 years to gain her trust financially. SO TELL HIM NOT TO SURRENDER THAT VEHICLE!

Good Luck,

K.

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Senior Contributor
StartingOver10
Posts: 4,519
Registered: ‎03-06-2010
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Re: Voluntary surrender of car

I'm sorry to hear your family member is having it rough right now.

 

But as pointed out before, having the vehicle repo'ed won't solve his/her problems as the rest of the note is still due plus all the default interest, repo fees (even if it's voluntary and he delivers it to the finance co) and all the other fees. He will be jumping from the pan into the fire.

 

Now would be the time for him to get whatever funds he can get together and get the vehicle current. Can he sell the vehicle? Is it too far upside down? Does he have things around the house he can sell to get extra funds? I'm not trying to be difficult...but he needs to get creative to prevent a larger problem that can potentially last a lot longer than 7 years (if it goes to a judgment and most repo's do go to judgment).


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