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I have a friend that purchased a vehicle last year. She has a job and can make her payments but that leaves her strapped now due to the economy. She asked me the other day if she should just surrender her vehicle? My first thought was no.
But if she does (because she really wants to) what affect beside a repo on her credit will she have?
She purchased a Honda, financed through Honda. She also rolled over a heavy amount from her truck last year when the gas was really high.
I told her to call her car company and see what they can help her with. She figures she can let go of the car and get her bills caught up.
I am not sure what advise to give her. Anyone here have this same issue?
What happen? What can she do?
If she turns it in the finance department will likely sell the car at an auction or to a Honda dealer for wholesale price, and then they will still charge her the difference between the wholesale price and the amount of her loan.
If she's really strapped for cash because of the payments, she needs to get a lower payment. Maybe a loan from a credit union with a longer term, so she can pay off the Honda loan and pay less each month. Surrendering the car will just leave her with a bunch of debt and no car, and no way to get another car.
If she's your friend, go through her budget and see where she can cut costs. Eating out, clothes, cable, etc.
If she's really strapped for cash because of the payments, she needs to get a lower payment. Maybe a loan from a credit union with a longer term, so she can pay off the Honda loan and pay less each month. Surrendering the car will just leave her with a bunch of debt and no car, and no way to get another car.
If she's your friend, go through her budget and see where she can cut costs. Eating out, clothes, cable, etc.
I told her to refi the loan, we have already looked over the budget. If she got out of the high payment car loan then she could pay down all her maxed out credit cards. I think she's stuck for awhile now. She doesn't to any entertainment such as going out or shopping. She has cut back on everything else, but things continue to raise at the grocery store and everything else. She can afford the payment right now, but I think she is worried about the long run. I feel bad for her.
If she turns it in the finance department will likely sell the car at an auction or to a Honda dealer for wholesale price, and then they will still charge her the difference between the wholesale price and the amount of her loan.
This is correct. Also want to add that it is considered VOLUNTARY REPOSSESION and Will affect her credit history for years. Been there, done that.
I would highly recommend selling it outright and then get a personal loan or even use credit cards or anything else to pay the balance off with the finance company. Hindsight is 20/20.
This is correct. Also want to add that it is considered VOLUNTARY REPOSSESION and Will affect her credit history for years. Been there, done that.
I would highly recommend selling it outright and then get a personal loan or even use credit cards or anything else to pay the balance off with the finance company. Hindsight is 20/20.
Thanks, I assumed the same. She is just going to have to deal with it. Or at least pay the vehicle down as much as she can then sell for whats owed. I told her to even go back to the dealer and ask them is they can sell it on their lot and then she could pay the difference. Don't knwo if dealerships do that kind of thing. Being that she can still pay the note while it's sitting there at the dealer..
If shes going to try and pay it down and sell it she needs to keep the mileage down to a minimum. She more miles she puts on it the faster it's going to depreciate, and the more upside down she's going to get.
I told her to even go back to the dealer and ask them is they can sell it on their lot and then she could pay the difference. Don't knwo if dealerships do that kind of thing. Being that she can still pay the note while it's sitting there at the dealer..
Dealers won't really work on consignment. There's no upside for them. They already sold that car once, they will try and sell every other thing on the lot before hers. She'll still have to make payments, and get zero use out of it.
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