topic Re: voluntary repossession in Auto Loans

voluntary repossession

Anonymous — Sat, 02 May 2009 20:03:55 GMT

Hello all,

I am strongly considering voluntary repossession on the car that I bought 6 months ago. I lost my job and I am currently one month late but still under their grace period. Ford motors is not even reporting this account on my credit report for some reason. What is the process for voluntary repossession? I owe 2k more then what the car is worth. I am 21 years old and currently in school. With a payment of $350 plus insurance it comes to over $500 which is something I did not consider when I first bought the car and now paying for my mistake. At this point its either I keep going to school or keep this car and I do not want to drop out. How do I go about this?

P.S. I dont have parents or relatives that could help me out.

Re: voluntary repossession

Anonymous — Sat, 02 May 2009 20:26:23 GMT

Repossession won't eliminate the debt. When they reposses, they sell the auto at auction then come after you for the difference.

So, if you owe $2k more than it's worth, that is the difference when selling the car. At auction the difference will be even greater, so you could end up owing $4-6k after repossession, which they will come after you for the difference.

I suggest you sell the car and pay the $2k difference, this will give you the least detrimental effect. If you don't have $2k, go to your local CU and talk to them about a personal loan. Sell some stuff if you can. Get a part time job if you can.

Re: voluntary repossession

MattH — Sun, 03 May 2009 01:23:28 GMT

@Anonymous wrote:
Repossession won't eliminate the debt. When they reposses, they sell the auto at auction then come after you for the difference.

So, if you owe $2k more than it's worth, that is the difference when selling the car. At auction the difference will be even greater, so you could end up owing $4-6k after repossession, which they will come after you for the difference.

I suggest you sell the car and pay the $2k difference, this will give you the least detrimental effect. If you don't have $2k, go to your local CU and talk to them about a personal loan. Sell some stuff if you can. Get a part time job if you can.

Agreed, original poster should do the utter totality possible to avoid a repo, and whether or not it's a voluntary repo makes no difference in the credit impact or the deficiency judgement for the difference between what they fetch at auction and what is owed.

Re: voluntary repossession

Anonymous — Sun, 03 May 2009 01:37:06 GMT

is your account currently overdue?

If not call Ford Immediately and request to defer a payment or 2. I am not sure if you can do this if the account is behind.

What kind of car is it?

2 months should get you to classes being over and you being able to find work.

have you filed for unemployment?

Shop insurance, see if you can lower it

Pizza delivery?

See about what lifestyle changes you can make immediately to scrape by on. You may be in a better position to delay a semester of school, get a job, and get caught up then if you just try to voluntary repo and live life.

Since you have no parents or family a voluntary repo will kill you on getting another car for YEARS.

Re: voluntary repossession

llecs — Sun, 03 May 2009 02:56:19 GMT

Ditto to everyone, and coming from someone who went through a repo, don't do it. Radically change your lifestyle to get this taken care of. If I had to do my early 20s over again, I would have dropped out of school sooner and focused on a job and earning income. Besides, you could always go back later.

Like usmc5855 mentioned, delivering pizzas could easily net an extra 800 after taxes.

As John hinted, you will owe the difference and their value of the car at auction is a heck of a lot lower than what you could sell it for now. Then comes the CO, the judgment, garnishment, etc.

Re: voluntary repossession

MattH — Sun, 03 May 2009 03:16:27 GMT

@llecs wrote:
...Radically change your lifestyle to get this taken care of....

I think llecs means, "learn to tell wants from needs." At the current stage of our lives my wife and I can and do spend money on many things that we do not need, but in the early years of our marriage when both of us were in graduate school we had to pinch every penny. And one of the jobs I did in that period to make ends meet was as a delivery driver and dishwasher for a Steak-Out restaurant. Some evenings I would go through the same police sobriety checkpoint six or seven times...

Re: voluntary repossession

llecs — Sun, 03 May 2009 03:45:32 GMT

In our case DW and I had to do a 180 in lifestyle so as to redeem the car and make good on future payments. Money never was an issue for us. We were at a point that we'd rather chase pleasure (vacations, travel, entertainment, hobbies, sports, etc.) and have some fun than make a payment. The only way we could prevent that from happening again was to change our we handled our money and that meant staying at home vs. going out, and was painful to do so. It was no wonder that our FICO scores while starting this repair process were in the low to mid 500s.

ETA....just saw the Steak-out link. I bet tips were better. I'd be in trouble if they had one here.

Message Edited by llecs on 05-02-2009 11:45 PM

Re: voluntary repossession

MattH — Sun, 03 May 2009 04:09:56 GMT

@llecs wrote:
In our case DW and I had to do a 180 in lifestyle so as to redeem the car and make good on future payments. Money never was an issue for us. We were at a point that we'd rather chase pleasure (vacations, travel, entertainment, hobbies, sports, etc.) and have some fun than make a payment. The only way we could prevent that from happening again was to change our we handled our money and that meant staying at home vs. going out, and was painful to do so. It was no wonder that our FICO scores while starting this repair process were in the low to mid 500s.

ETA....just saw the Steak-out link. I bet tips were better. I'd be in trouble if they had one here.
Message Edited by llecs on 05-02-2009 11:45 PM

When I worked at Steak-Out, tips varied wildly. The most reliable tippers were female undergraduates, for some reason. Fortunately for me, unlike many retail establishments they did NOT take bounced checks out of my pay so long as I had followed the prescribed policies like checking ID. I had heard many restaurants did take bad checks out of servers' pay so was glad mine did not.

Edited to add: within the delivery area of the Steak-Out where I worked was a nationally-known diet clinic surrounded by several budget motels that mostly catered to their clientele. Whenever I made a delivery to some really huge customer at one of those places I would suspect they were cheating on their diet. I saw all kinds of people in that job, one little old lady was a regular customer and very generous tipper but whenever the temperature was below about 75F she would tell me I should dress more warmly which I found a little irritating.

Message Edited by MattH on 05-03-2009 12:09 AM

Re: voluntary repossession

Anonymous — Tue, 05 May 2009 00:30:34 GMT

disregard my rant, I decided to keep making my payments, hopefully I can refinance later. With all the 0%APR offers now, my 10.9 seems very steep.Lesson learned.

Re: voluntary repossession

Anonymous — Tue, 05 May 2009 03:02:51 GMT

Still wondering what kind of car you have

And as I said once you get "caught up" you can defer a payment or two

Re: voluntary repossession

llecs — Tue, 05 May 2009 10:50:33 GMT

dvroberts81 wrote:
With all the 0%APR offers now, my 10.9 seems very steep.Lesson learned.

I know how you feel. We were stuck with a 19.9% rate on a $25k loan. We just made the last payment last week and on hindsight, we are thankful that we didn't give up. Otherwise we'd have 2 repos instead of one.

Re: voluntary repossession

Anonymous — Mon, 11 May 2009 01:06:12 GMT

@llecs wrote:
@Anonymous wrote:
With all the 0%APR offers now, my 10.9 seems very steep.Lesson learned.
I know how you feel. We were stuck with a 19.9% rate on a $25k loan. We just made the last payment last week and on hindsight, we are thankful that we didn't give up. Otherwise we'd have 2 repos instead of one.

And this is why so many of us recommend DON'T BUY A NEW CAR if you can't qualify for a good rate. You will end up regretting it. You will end up with some type of buyers remorse. You will end up seeing how you could have made better use of your money. It is very short lived...the thrill of driving away in that new auto with the nose bleed APR. Like the Chinese Water Torture.....drip, drip, drip....those payments and interest that are painless in the beginning, over time develop into painful torture.

Re: voluntary repossession

Anonymous — Mon, 11 May 2009 21:04:15 GMT

My son-in-law got divorced and they had a car which was primary account holder was his ex-wife and he had to sign as the joint account holder. Well she went bankrupt and he had only had the car a short time and was told by American Honda that he would have to break the 1st lease which he had given them a down payment of 2000.00 and then would have to take out another lease in his own name but would need 3,000.00 to put down on the least. The lease at the time was for 3 years and he only had 6 months into the lease. they told him he would have to voluntarily return the car which is what he did. However it is on his credit report since 7/2002 when this happened. Is there any way for him to get this removed from his credit report. When he called American Honda they told him they could keep it on his credit report up to 15 years. I do not believe they can keep it on for 15 years as there is no judgement or lien about it. I would like to see if there is anyone who knows a way that this could be taken off his credit report. Any information anyone has that could guide him on how he can get something done on this would be appreciated. It will be 7 years 7/2009. He needs it off his credit report before September so any information out there will b e helplful. thanks

Re: voluntary repossession

Anonymous — Mon, 11 May 2009 22:23:50 GMT

If he returned the car, it will stay on his record for 7.5 years I believe from the date it was sold (not the date he turnd it in and there may be quite a difference in these dates)

If he paid the deficiency balance of the lease (there would have been money owed after the car was auctioned) the company may be willing tor emove the items.

Re: voluntary repossession

Anonymous — Mon, 11 May 2009 22:42:31 GMT

Thank you for the information. He just pulled 2 out of 3 credit reports and one says it comes off his credit repor in May 2009 and the other one says June 2009 so we will see. I never heard it to be from the date it was sold but I don't know all the rules. I thought it went by the date of last activity not the date of the last payment. It is confusing. The dates that EQ has is May 2001 and Experian has June 2001 but the report says the last payment was 9/2001 so which is it. I hope it is May and June because then they will have to remove it then. It is just very confusing.