It would save me money to qualify for a loan now, get the new vehicle and then walk away from the current lease, probably about $2-300 a month. I own a home i rent out I am looking to sell and still want to purchase a primary residence. It is crazy that when I realize my debt exceeds my income the leasing company will not help me out. Their answer is to pay the residual and get out of the lease, which is 17K. Any advice or ideas? I was unemployed for a few months this year and am now working just not at the level of income I was at. I have 5K in checking and saving I dont want to use, 15K in credit card debt and 55K in a money market.
2007-09-18 10:58:58 · 4 answers · asked by jim h 1 in Business & Finance ➔ Credit
It will give you a big fat negative rating on your credit report and will reduce you FICO score.
I suggest going down to talk to the car company and ask them if they will let you out of the lease without reporting anything negatively. Tell them you will buy your new car from them. But get it in writing!
Also, since you already own a home and if you don't intend on refinancing within the next seven years, then I guess you could walk away from the lease.
Leases suck big time - as you are aware. Been there, done that, will NEVER do it again. I got big time screwed.
Good luck.
2007-09-18 11:06:25 · answer #1 · answered by Mommy 3 · 0⤊ 0⤋
Voluntary repo is the same as in involuntary repo. Your credit score will take a big hit.
You will still be liable for the balance of the lease.
Have you considered finding someone to take over the lease?
2007-09-18 11:06:31 · answer #2 · answered by bdancer222 7 · 1⤊ 0⤋
Voluntary or not, it will hurt you. Don't think that giving them back the car is going to cancel out your debt. You signed a legal binding agreement saying you will pay them no matter what. So guess what? I know you are used to getting everything you want, when you want it, but your circumstances are saying, you are going to have to wait to buy that other house. If you really want to get out of it, use your money market account funds and pay it off. Please learn from this. Is it really necessary to buy Brand new cars? Expensive cars?
2007-09-18 11:06:25 · answer #3 · answered by Brain 4 · 0⤊ 0⤋
Auto finance is what I do for a living and believe me you do not want to do this.
The lender will sell the vehicle at auction for less then it's worth and come after you for the balance plus all fees, this will amount to several thousand dollars.
If you do not pay, they can take you to court and get a judgment, at that point they can attach bank accounts, garnish wages (if your State allows it) and file liens on any other property you may own like cars, boats, land and homes.
All of this activity will show on your credit report making it very hard to get any other types of loans without making massive down payments, paying huge fees and State maximum interest rates for the next 7-years.
2007-09-18 11:16:15 · answer #4 · answered by ? 7 · 1⤊ 19⤋