How Much Will Turning In My Car Affect My Fico Score

[Kree]

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@DeeBee78 wrote:

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@Anonymous wrote:

Greetings,

I foolishly purchased a used car for $55,000 that I simply cannt afford at $1000 per month. I spoke to the dealer less than a month after purchasing and was informed that I would lose approximately $20,000 if I returned the car, which I found to be unconscionably excessive.

I have a credit score of 801. I have $116,000 available credit spread across 27 credit cards with a 1% utilization rate. My questions are as follows.

1. Will turning in the car destroy my credit score, completely?

2. If not, how big a hit off of that 801 score can I expect

3. Will the credit card companies get wind of this and cancel all of my cards?

I have no other outstanding debt other than a modest mortgage payment. I have no interest in filing for bankruptcy. I just want to get out from under this payment before I start to fall behind and destroy my credit, down the road.

Thoughts and suggestions would be greatly appreciated.

Cheers. - Frank

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Chances are you aren't as upside down on the loan as the dealer is leading you to belive. They sense your desperation to get out of the loan and are low-balling you, hoping they can turn the car around and sell it for $50K+  to someone else. A three year old BMW (guessing, from the other posts in this thread) has already had a steep depreciation curve, and shouldn't be losing value *too* quickly for you to get ahead of the loan. 

You talked about making some extra cash by going back to work part time. Throw that money towards the principal balance, and you'll be above water in no time, and in a great position to sell it private party. Do not sell it back to the dealership.

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This.   Dealers pay low and sell high.  You could definitely get a better price on the private market, perhaps not 55k, but much better than 35k.

[Anonymous]

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@DeeBee78 wrote:

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Chances are you aren't as upside down on the loan as the dealer is leading you to belive. They sense your desperation to get out of the loan and are low-balling you, hoping they can turn the car around and sell it for $50K+  to someone else.

Paragons of virue.  lol

A three year old BMW (guessing, from the other posts in this thread) has already had a steep depreciation curve, and shouldn't be losing value *too* quickly for you to get ahead of the loan. 

Agreed.

You talked about making some extra cash by going back to work part time. Throw that money towards the principal balance, and you'll be above water in no time, and in a great position to sell it private party. Do not sell it back to the dealership.

I don't think it makes any sense to pay down the principal based upon my age and health. If I bank the $500 a month I'll have $12k stahed at the end of two years. I think I'll live that long. Should I pass, that $12k will be much better served going to my heirs as opposed to the creditor. They'll simply be taking back a car with $12k more owed on it - but what does that matter to me? Nothing.

If something changes in regards to selling or deciding to keep the car, I'll have some cash to play with and as you said, the depreciation shold have greatly lessened over that period of time. I do plan, in the immediate future to start looking at prices in the area to give me some basic information to start with. That said, I'd rather work one day a week, sock some money away and try to enjoy the car until I have to sell it - or I croak.  lol

I appreciate your succestion, though.

Cheers. - Frank

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[Anonymous]

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Kree wrote:

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This.   Dealers pay low and sell high.  You could definitely get a better price on the private market, perhaps not 55k, but much better than 35k.

 Agreed. Thank you.

Cheers. - Frank

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