I bought a new car about a year ago, interest is high, can I still turn it in? Help!?

Question

I bought a beautiful 2007 Toyota Avalon about 11 months ago when I was able to aford it even though the bank gave me an 8.5% APR for six years. Upfront when I got it I added insurance from the dealer so that the car wouldn't give me problems in the future ( I didn't know the car had warranty from the manyfacturer for the first 45,000mi), thus I'm paying more than what the car is worth. Today, I am going through financial harpship and I can't keep up with the monthly payments. I still owed about $30,000. I want to know if i can still turn in the car to the dealer who sold it to me because it hasn't been a year yet, and get rid of the car? Any suggestions are greatly appreciated in advance, Thanks.

Answer 1

If you turn the car back you don't give it to the dealer, you give it to the finance company. They will process it as a repossession and your credit will be trashed. On top of that, you owe more than the car is worth and will have to come up with the shortfall in cash immediately upon its sale if you wish to have any chance of salvaging your credit rating.

Sorry, but your only options are to let it go to repo or tough it out until you're right side up and sell it. Since you owe more than it's worth, not even trying to sell it will work since nobody is going to pay you more that your car is worth.

Next time, READ THE CONTRACT before you sign it! And become an informed buyer! Everyone SHOULD know that every new vehicle sold in the US comes with a manufacturer's warranty. And most folks know that Toyotas are some of the most reliable vehicles on the road and there is statistically no need to buy an extended warranty.

Lastly, NEVER finance a car for more than 4 or at the absolute most 5 years! With a 6 year note it may take upwards of 4 to 5 years to get right side up on the note. If you can't swing the payments on a 4 or 5 year note, buy less car the next time. An Avalon is a wonderful car, but if you had bought a Corolla or a base version Camry you would probably not be in this situation now. Again, it all comes down to being an informed buyer.

Answer 2

Okay, at this point you have a vehicle worth around $21,000 that you owe $30,000 on, and you want to know if you can return it after driving it for almost a year, and walk away from it. Short answer is no, you can't.

You have to add extended warranty coverage when you buy it to get it, and it starts after the factory warranty runs out, so you are not covered double if that's what you are thinking.

If you get behind (generally 90 days) they may repossess the car, and if you think you have financial problems now, wait until that happens. If they do, they will sell it at auction, and you will owe whatever is left over after the sale, plus the costs of the repossession. You don't want to go that route unless there is nothing else you can do.

It's doubtful anyone will buy it since you owe more than the worth of the vehicle. That's called being upside down in your loan.

Got any rich relatives that might pay it off and let you make smaller payments to them for longer? That might be your only out.

Answer 3

oing car shopping with a new paycheck sometimes is like going to the grocery store when you are hungry: you end up with way too much in your basket and end up having to toss half of what you bought because it goes rotten in your fridge.

With a car, when you sign a 5-year loan, it pretty much means that for 60 months, like it or not, you have to make that payment unless you are able to pay it off in advance. Short of having a big windfall of cash coming in, you will probably have to sell the car and in most cases, you will still owe a balance on the loan because the loan balance is for more than the car is worth.

If you went back to a dealer and used the car as a trade-in they would give you wholesale value credit for the car and roll the balance that into yet another. You could end up paying as much to drive a car that isn’t as nice as your ‘Stang.

A better option is to sell the car yourself and get more than wholesale which will lower the amount that you will owe to the lender and then start afresh with a new used car.

Don’t forget to try your credit union or bank for your next loan. Very often they will have better rates than any dealer will want to give you. And, when you find you more humble car, count it as a lesson learned.

Good luck!

Answer 4

No you're stuck with it. No dealer can afford to give a refund or cancel a financial transaction. For years and years the financial advice writers in the newspapers have recommended not buying add-on warranties. I guess you never read them. The add on warranty is a great source of easy income for the dealer and they pay handsome commissions to the sales person who brings in the policy. since it almost all profit. The customer has a few years to regret it. I would talk to the dealer and see if he can get you refund to cancel the policy and maybe make the payment burden a little easier. Don't hold your breath though, Good Luck!

Answer 5

If you plug your car with options into kbb.com or edmonds.com you can find out what it is worth. But you may find that you did not pay enough of a down payment and are "upside down" on your loan. In other words you may owe more than the car is worth and have to pay thousands of dollars for someone to take it off your hands.

An extended warranty only makes sense if you do NOT have faith in the brand you are buying. Even if it does pay, you are paying in advance for repairs that might happen years down the road. It might never pay for itself for most Toyotas.

The last new car I bought new was a 1995 Maxima SE 5-spd purchased May 94 that got me going backwards on my credit cards for 4 years. That car is still a joy to drive, and no car payments since 1999. When I was looking for a replacement for an old pickup in 2004 I paid (cash) half the price of a new one for identical 2001 Pathfinder with 99,000 miles on it. But I from experience with Nissan had faith that it had many more miles of life (both still working great).

You might check out CarMax.com (where I traded my old truck) or similar to see if you could trade down to something you could afford. Although, I do not know if they give loans for more than a vehicle's value if you end up short of what you owe on the Avalon.

Answer 6

Everyone says the same thing. You are basically going to have to deal with the car. Why did you buy such an expensive car to begin with? I'm willing to bet that at the time, you could barely afford the car to begin with. Only after the 3rd year will the value of the car and it's payoff will you break you even. Sorry dude.

Answer 7

Once you drive it out of the dealer, it is yours. You can't give it back and get your money back. Only thing you can do now is, sell it and pay off your loan. Then get transportation you can afford.