Auto finance is what i do for a living and there are several things you should take into consideration.
First the lender will sell your vehicle at auction for less then it's worth and come after you for the balance plus all fees for the repossession, towing, auction, reconditioning, storage, interest and lawyers.
This can amount to several thousands dollars and 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 for the next 7-years making it very hard to get any other types of loans without making massive down payments, paying huge fees and State maximum interest rates.
You would be much better off selling the car yourself and taking out a loan to pay the difference, this way your credit is not ruined for the next several years.
2007-10-29 06:25:11
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answer #1
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answered by ? 7
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This may or may not work for you, but it is something I had done a few years ago (about 20). I contacted my lawyer in Vermont and told him I needed to reduce my debt to equity ratio.
He informed me to voluntarily return the car to the dealer where I purchased the vehicle. In this way, it was not considered a re-possesion and the dealer would have to credit me with the fair market value of the vehicle and I would be responsible for the balance owed on the loan.
I followed his directions. Dropped car off at dealership and waited. Sure enough some idiot called me and and stated the vehicle was sold at auction for $300 (NADA value $3.400). I told him too bad you sold the car at a loss!
Needless to say I never hear from them again and this never appeared on my credit report.
It may not work now, but it sure was fun telling them where to go.
Good Luck to you
PS this is NOT legal advice, just some input.
2007-10-29 16:32:08
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answer #2
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answered by Sgt Big Red 7
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The finance company shall take over the title to the car and most likely sell it at auction or to a car dealer they have an agreement with. They will get their money from the car. You will suffer a loss in good credit. This will affect you when you apply for any type of loan in the future.
2007-10-29 13:21:08
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answer #3
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answered by earl c 3
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Unless you can work out a deal that will allow you to return the car for what you owe on the lease (unlikely), they will take the car, sell it at wholesale auction and sue you for the difference.
You might try to find someone who can take over the payments.
If the car is not in perfect shape, forget it.
You will get a (default) judgment good for 10 or 20 years, depending on your state, or if the debt balance is forgiven, you will have to pay income taxes on the forgiven amount in next year's tax return.
2007-10-29 13:19:42
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answer #4
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answered by thylawyer 7
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Assuming that the creditor will even accept the car back outside of a legal repossession, if the creditor can sell your car, you will owe the balance between what they sold it for and what you owed them.
So if you owe them $12,000 on your remaining balance and they sell the car for $9,500, then you will owe $2,500 to the creditor.
2007-10-29 13:17:21
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answer #5
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answered by kja63 7
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You are responsible for the difference between the loan value and the cost of reselling the car, and any interest.
Returning the vehicle does not absolve you of your responsibilty for the debt.
2007-10-29 13:18:46
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answer #6
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answered by patrick 6
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You would still be responsible for whatever is owing after the car is sold.
2007-10-29 13:16:39
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answer #7
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answered by eugene65ca 6
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