Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Another idea is to list your car for sale as "take over payments" and possibly someone with less than stellar credit can get your bank to accept them and pay off the note, leaving you free and clear.
This may not be a factor. Reposssession laws vary by state as to whether a "deficiency judgment" (a judgment that requires you to pay the amount above the value of the vehicle in the event that it is repo'd) is permitted. Read the link below from the Federal Trade Commission for more information.
That being said, I would either keep the loan current or else try to sell the car on a TOP basis, as was suggested above. Perhaps as an alternative, you can refi the loan or otherwise find a way to reduce the interest rate, if that happens to be high. Whether or not you are upside down, the lender is not going to hesitate to take your car if you stop making payments.
You don't want a repo on your credit rating. That will be an expensive mistake that you will literally pay for with all of your future borrowing costs just as long as the repo is on your credit report.
FTC link
I'm sure you don't, and you shouldn't have to. Just drop the car off at the dealership and post the keys in their mailbox, they'll take care of the rest.
Wow. Just .... wow!
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
best advice yet.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
Anytime now I expect to read a post from someone who owes $25K on a Chevy Aveo...
and doesn't like the color, so they HAVE to get something new ... but want a lower payment.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
They bought it when Mitsibishi was doing their Zero down zero payments for X amount of months and then they rolled in a few thousand dollars of negative equity... They had only been making payments on it for 18 months I think and hadn't even paid off the taxes/registration fees yet.
It would have been funny if it was not so sad.
That was the vibe I got, I just wanted to be sure...
This thread gets a desperate posters every now and then that are quite the same. I remember the gal that had to have a SUV at the end of 2005, when the gas prices were attached to a booster rocket and Metro Transit and bike shop were raking it in. Then a few months later she could not afford to put gas in it.
I have no pity towards them any more.
Suggestions? We know the finance company wants the money, not the car. Is there any way out of this short of repossession?
Any advice would be greatly appreciated.
My one other experience like that in my memory was a credit card that has an insanely low interest rate from quite a while ago on a transferred balance deal. Again I was ill and missed a deadline. This resulted in a late fee and the great interest rate turning into an ugly one. My wife made one phone call and they took off all fees and brought the interest rate back down. This was not a company normally known as nice guys. If you are straight with them they will usually make something work.
Just a note - if your credit stinks and you have a history of late payments or defaults the above will not hold true.
Is your mother going to lose this car anyway? In other words, she is not going to be able to get the money to make payments? And, there is noone that will take the car and take over the payments? (Be very careful here. You don't want someone else to physically have the car, not make payments, and your mother still have the loan in her name. You need to have a lot of confindence in the person taking over the loan...)
Is the car worth more or less than the remaining loan amount?
If it is worth more than the loan amount, selling it for this would be the way out.
If it is not worth the loan amount, and it will be lost in any case, don't make any more payments, these will essentially be lost money. Just call the finacnce company and make arragement to return the car. This is still a repo, but there is no reason to have the car towed, with possibly personal items inside that have to be retrieved, etc.
If it's a lost cause, give it up.
I recently saw a relative lose a car. Bought from one of those By Here, Pay Here places, I think.
He was behind. They sent out a couple of girls/young women to talk to him. If he would have given up the car, I think they (since there were 2 of them, one to drive his car), would have taken it.
After talking to him, and another family member talking to them, they did not take the car. I think they might have gotten $100 or so, which still did not get him caught up on the loan.
In a few days he got some more money together, which he paid aganist the loan. But in a couple more weeks he continued to be behind and lost the car.
Anyway, I got to thinking about this. They send out a couple of young girls, not 'Big Fred' with a tow truck, greasy overalls, and a big wrench in his back pocket. These non-agressive girls can successfully pull a few more dollars out of him. (From 'loans' from family members that are not actualy loans since they will never be paid back.) They probably come by a time or two again and pull some more money, but he never has enough to be 'caught up'.
The car is taken back. Any of this additional money they were able to pull out of him after he got behind is just more gravy for the BHPY seller. They've got the car again, it's a semi-junker in about the same condition as when he got it a few months ago, they will be able to resell the car again for the same amount he bought it for.
Anyway - The bottom line. If you are going to lose the car, let it go. Any money given in the last few days is just gone. It is an expensive way to get a few more days transportation.
I guess thats one way to look at it. Another way would be that they collected more of the money in which he/she signed a contractual agreement on.
If in this case the car is worth, say, $1K less than the loan balance I'd try to get the $1K together. A decent credit record is worth more than that and a bad mark on your credit stays there for at least three years.
Obviously there are individual cases but as a rule you want to keep those things to a minimum.
Plus there is the validity of a signed contract and a moral obligation to live up to it.
But you're not familiar with how BHPH works...it's in their business plan to repo as many cars as possible, but only after squeezing as much money as possible off the borrower. It's a viscous circle for most buyers.
Do I have this straight? You lend me $1,000. I pay back $100 then skip town. I can have a clear conscience because you're holding gravy, right?
tidester, host
SUVs and Smart Shopper
I am not familiar with them? Well thank you for pointing that out to me. I will make sure they know that when I am standing out front this evening before we close BS'ing with 3 or 4 of them that are here to buy are wholesale pieces from the weekend. Maybe one them can explain it to me.
You saying they are in the business to repo cars is crazy. they in the business to have a very, very strong AP Account, a large group of people making there payments on time every week. When they open the door on Saturday morning the want a large pile of envelopes laying there that came through the slot from FP's (Friday pays)
They do not want to chase paper
They do not want to pay a repo man
They do not want to hassle with a PO'ed customer
What they want is you to pay your fricken car payment like you promissed you would when you signed the contract. I think it is funny how allot of you think you can just wipe your feet on these guys because they are a BHPH lot. That speaks volumes.
How about the story about the Camero a few years old that had been sold 18 times by the same lot?
No, that's not quite straight. Now, I definitely don't agree with defaulting on an agreement.
BUT, in your analogy, he only got back $100 out of $1000. In the car situation, he got $100 PLUS the $1000 car back ... at which point he'll sell it again for $1000.
'11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S
I can wipe my feet on them because as a CPA, I've had close financial relationships with several of these BHPH shops. I've also terminated my services to all of them . I don't do business with folks when I'm not morally comfortable with their business plan. I've also cut clients involved with resort sales (selling "memberships" to people that can't afford it at 20% interest, repo'ing, then selling it again...), cash advance stores, and just plain folks I don't like. Not everyone can pick their clients, but I do and it's worked out well.
I really doubt any are going to tell you "yeah, we love it when folks default" as these guys are trying to keep a low profile. Last thing they want are legislators breathing down their necks like some of these other questionable businesses.
With or without a family or estate, I doubt that the dealer will leave the car sitting in the driveway for long. Alive or dead, no pay no car!
I've got a 2004 Aero 9-5 Wagon that has about 18 months to go on a 4 year lease. So far, unlike my prior Saabs, this car has been flawless. My question is, what should I do as far as the lease goes. If I keep driving at the present rate, I'll be at 62000 miles on a 48,000 lease. Also, my warranty is up at 50k too if I'm not mistaken.
Should I try to get out now? Consider an extended warranty and try keeping it next year? Its about $10k upside down at this point due to having to roll in negative equity from a sludged Saab. Thanks.
Get the exact payout, and if you're upside down because of a dealer's appraisal, see if you can sell the car yourself privately. With Honda, lease customers can sell the car themselves, pay the payout to Honda Finance, and keep the rest for themselves if there is any equity left that way.
I don't know if you can do that with Saabs though.
If you're upside down $10k even when you sell it privately, see if anyone would want to take over your lease, but that might be a tough sell, as the warranty is almost up.
If you do really like the car though, and you think it's worth keeping, then I would seriously consider getting the extended warranty, so that you have some protection after you buy out the car.
Otherwise you have to ask yourself if it's worth buying a warranty on a car you will be returning in 18 months.
One thing to be weary of is having excess mileage penalties, AND repair costs added on to a car that's not yours. The costs could add up quite quickly.
The thing I wouldn't do is to roll the negative equity into another car. This way you'll just drive yourself to the poor house.
2016 Audi A7 3.0T S Line, 2021 Subaru WRX
The cheapest way out? Buy a $3000 beater, and park that Saab when it hits 49,900 miles.. That way, no out of warranty costs and minimal mileage charges.. At the rate you are driving, that will only be 10 months of driving a beater..
When the lease is up, turn in the Saab and sell the beater, and start with a clean slate... This is way cheaper than paying maintenance/repair bills on a used Saab, or buying an extended warranty and paying the over-mileage charges.. Of course, you won't be driving a Saab for a year.
Don't lease for four years.... and don't take a lower mileage allowance than you need..
regards,
kyfdx
Edit: Buy the beater now.. Use it to commute... You'll still have the mileage on the Saab to use for weekends/travel..etc.
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2016 Audi A7 3.0T S Line, 2021 Subaru WRX
My advice is to not make payments on something to have it sit in the garage. Drive it, if you go over on miles so be it but at what you project your mileage would be at .20 a mile you are talking about $2800. Don't try to trade it you would lose 4 times that.
If your old POS car needs a bunch of work, you can just dump it... You are out $3000 at most...
A Saab out of warranty? The potential loss is unlimited (well.. at least up to the residual value)
I do agree... driving the Saab and racking up the mileage charges would be preferable to trying to trade it in for a $10K loss..
But, I'll stick with my beater recommendation.. I want that Saab in warranty until it leaves my driveway..
regards,
kyfdx
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Also, I try not to look at it, as making a payment on a car that is sitting... His payment is what it is, because of the mileage allowance.. So, he has sort of already used up those last payments, even though he hasn't paid them yet... If he had taken a 15K/yr allowance, his payment would have been even higher. I'm guessing that he went for the 4yr/48K lease, because with the negative equity from his last car, it was the payment that fit his budget, even though it didn't fit his driving needs.
Another reason I like the idea of the beater, is the idea of doing penance for making poor car decisions.. Instead of trading into another nice car, you get to feel the consequences.. hopefully, keeping you from making the same mistake the next time..
Just kidding on that last part (maybe)... I really do think buying a nice $3000 car to put 12K miles on over the next 18 months is the best idea.. Plus, you'll still have your Saab to drive to McDonalds on dates..
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Lesson learned, instead of getting mad, then resigned to paying the higher price...perhaps I should have fought more.
Needless to say, whenever I make my payment today...I'm not happy. I like the car just fine...just not for the price I'm paying and the situation. From now on its synthetic oil changes, a file folder for receipts and cross my fingers.
Bottom line...I have to pay the money sometime...either at the end of the lease...or now by bringing cash on top of my trade. What say you?
So what's the problem? It sounds like the car is almost as good as new and the price you are paying each month is the same as it was when you began the lease.
As Joel suggested, keep driving the car and pay for the additional mileage when the lease is over.
You aren't losing anything. If the original lease had been for 15K miles per year, it would have cost more, so it all evens out.
Next time leae a more reliable car like an Audi or a Jag.
phollie--
Maybe I'm missing something here, but given your tale of woe with the first Saab I'm surprised that you bought a second, particularly since corporate Saab has laid the blame for the sludge on you, which I find questionable.
As has been pointed out there are no great solutions to your predicament. Kfydx was quite helpful to me on the "real world trade in" forum and suggested roughly $2900-$3400 for an old Civic I own. Given my history with the car I would trust it infinitely more than your significantly newer Saab and would expect to spend considerably less on repairs. I wouldn't even view driving a Civic as penance although you might. So I concur with kfydx that a sensible used car (aka beater) might be cheaper in both the short and long run--especially if the Swedish stars fail to align.
Gogiboy
The fact that you don't own the car makes no difference, you are still responsible for it. Protecting yourself with a warranty if you feel you need to just makes sense. You insure it even though you don't own it, a warranty, if you feel you need one, is no different
You want a REAL Saab story, buy an Audi and mile it up.
Please respond to jfallon@edmunds.com no later than April 25, 2007 with your daytime contact information and a brief description of your purchase and your trade-in, if you had one.
So, if you were not thrilled with your SAAB experience, why in the world did you give them more money?
So here I sit with a leased car with three months to go with a blown engine that they blame on me.
3 months on the lease couldn't have been more than $1000, would you have been better off just paying off the lease and turning the car in?
Was that a Turbo SAAB? How often was the oil changed?
To the foregn comment, older SAABs were Sweedish, since the mid-90's SAABs are no different than Chevy Malibu, pure American car made in Sweeden from GM parts bin.
I have a car that is worth about $20K, I owe $12K, I did not put any money down, it is 2 years old... and not sure if I should cash out, lol. I think it is at the highest point of its resale curve.
Any suggestions?
Did you trade a paid for car in? If not please share with us what kind it is?
Mine is worth $11K-$12K and I owe nothing...
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