canceling the finance of a car. (insurance, vehicle, auto, credit)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Tell your friend to move to a place that doesn't require any credit, cause his will be near worthless once he stops paying on his note. If he no longer needs the car, he needs to sell it...if he thought that "not needing" the car was a possibility, he'd have been better off leasing it, or purchasing a beater instead of paying almost $600 over a period of 5 years for something he apparently doesn't want.
His only real option is to sell the car. Tell him to call the financing company (bank, etc) and get a "payoff amount". Often your car paperwork shows an amortization schedule, which will show how much you owe after each payment...I'm not 100% if cars are structured like homes, but I do think you pay more interest initially, and more principal as time goes on (this is designed to prevent people from doing this exact sort of thing...) Odds are, your friend is upside down on his loan also. I'm not sure if GAP insurance will cover the sale of a car, I know it covers accidents where you're upside down, but I'd guess it doesn't cover a voluntary sale. If his payoff amount is $40,000, and he's only able to sell the used car for $35,000 he'll be responsible for the remaining $5000 to the bank and can either pay it off at the time of the sale or schedule a repayment method until the amount is paid in full.
Tell your friend to move to a place that doesn't require any credit, cause his will be near worthless once he stops paying on his note. If he no longer needs the car, he needs to sell it...if he thought that "not needing" the car was a possibility, he'd have been better off leasing it, or purchasing a beater instead of paying almost $600 over a period of 5 years for something he apparently doesn't want.
His only real option is to sell the car. Tell him to call the financing company (bank, etc) and get a "payoff amount". Often your car paperwork shows an amortization schedule, which will show how much you owe after each payment...I'm not 100% if cars are structured like homes, but I do think you pay more interest initially, and more principal as time goes on (this is designed to prevent people from doing this exact sort of thing...) Odds are, your friend is upside down on his loan also. I'm not sure if GAP insurance will cover the sale of a car, I know it covers accidents where you're upside down, but I'd guess it doesn't cover a voluntary sale. If his payoff amount is $40,000, and he's only able to sell the used car for $35,000 he'll be responsible for the remaining $5000 to the bank and can either pay it off at the time of the sale or schedule a repayment method until the amount is paid in full.
Good luck!
yea i need to know the options because he went to the dealers. and the dealers are giving him bias talk about how he cant give it back or else his credit is done, and the only way to give the car back is to pay the rest off on the spot.
He needs to get the pay off amount from the bank that issued the loan.
Then he needs to see if he can get that amount from selling the car to a dealer or a private party.
Most likely your friend is upside down, which means he owes more on the car than it is worth. If this is the case, he'll need to write a check to the bank to cover the difference. Happens all the time, it's only money
yea i need to know the options because he went to the dealers. and the dealers are giving him bias talk about how he cant give it back or else his credit is done, and the only way to give the car back is to pay the rest off on the spot.
Hows that bias talk?
Sell the car and pay the remainder, if any, out of pocket. The other alternatives are (with gap insurance) to commit a felony or trash your credit.
I was thinking tell your friend to either blow the vehicle up or run it off a cliff, then call the insurance company and try to collect, then while sitting in jail for a long period of time he won't have to worry about payments anymore. Then when he has served his time and released tell him to pay cash for the next purchase since he will not have any credit anymore.
Your welcome...
Giving back the car is voluntary repossession, and would create an issue with respect to his credit. If your friend lives near a Carmax, get a buy figure from them, and see how that works with respect to the payoff from the bank. A few month old car with $600/month payments is not going to be easy to sell for cash on Craigslist, or the like, so looking to a dealer who will buy the car is a good option. Carmax may be on the low side, or perhaps not. Also talk to the dealer for the particular make and see if they will purchase the vehicle, and at what amount. Under no circumstances should he stop paying on the car until it is sold, and arrangements have been made with the finance company to cover any shortfall. That is, unless he wants to ruin his credit for a good number of years.
__________________
All the world's a stage, and all the men and women merely players: they have their exits and their entrances; and one man in his time plays many parts, his acts being seven ages.
~William Shakespeare (As You Like It Act II, Scene VII)
Giving back the car is voluntary repossession, and would create an issue with respect to his credit. If your friend lives near a Carmax, get a buy figure from them, and see how that works with respect to the payoff from the bank. A few month old car with $600/month payments is not going to be easy to sell for cash on Craigslist, or the like, so looking to a dealer who will buy the car is a good option. Carmax may be on the low side, or perhaps not. Also talk to the dealer for the particular make and see if they will purchase the vehicle, and at what amount. Under no circumstances should he stop paying on the car until it is sold, and arrangements have been made with the finance company to cover any shortfall. That is, unless he wants to ruin his credit for a good number of years.
so his credit wont go sour if he does it that way?
Someone ruining their credit for many years just because of a car....Gezzz man throwing away your credit and becoming a second class citizen just because of a stinkin car..... Thats real smart...
so his credit wont go sour if he does it that way?
If he sells the car immediately and makes any payments to cover the shortfall, his credit would be fine. Find out what he can get for the car tomorrow, and find out what the bank has a the amount owed. See how different the two numbers are, if it's a couple of payments, talk to the bank, sell the car, and make arrangements with the bank to continue the payments, and his credit would be fine. In essence, the loan would be transferred from being secured by the car to a signature loan for the difference. And, as long as it is paid, the loan would be repaid in full, so no damage to his credit.
If he just hands the car back to the finance company, it's a voluntary repossession, and that's not good with respect to credit, though not as awful as missed payments and a repossession. However, he could be liable for any shortfall in the car's value when sold and the amount owed on it.
When selling a nearly new car, I would go to a reputable dealership (not buy-pay here lot) because you don't want to waste time with trying to sell it on Cragslist or Auto Trader as there are many flakes around. At least with a dealership, you may be taking a bit more of a loss, but their $20k ,$30k, etc. check is good, or they will arrange payoff with the finance company. Be sure to follow up with the finance company if the dealer is handling the payoff, to be sure that it is done on time, so that there is not money owed because of a delay.
__________________
All the world's a stage, and all the men and women merely players: they have their exits and their entrances; and one man in his time plays many parts, his acts being seven ages.
~William Shakespeare (As You Like It Act II, Scene VII)
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
