Turning in your car? Voluntary Repo?? Stuff like that... - Mothering Forums

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Old 03-01-2005, 01:41 AM - Thread Starter
 
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Hey ladies,
Back in the summertime we bought a new car. DH was leasing a car and decided to turn it in because his job is far from home and too many miles were being put on the car. Rather than buy that car, we decided to purchase a different one. (This is the short version of the story).
One reason he bought this car was because he was working at a Ford dealership and got a maintenance plan, etc. Just made it easier to maintain since he'd be working where the car would be.
I kind of thought it was silly... thought let's get a good used car.. fell on deaf ears. Felt this was a great job he finally had, was making good money... we can afford it... Now we're literally paying for it.
Lo and behold, the dealership he was working at had budget cuts a few days before thanksgiving and my husband was one of them. With him being out of work obviously made things extremely difficult financially. He didn't get another job for almost two months.
So now he finally gets it since we're feeling the repercussions of what happened. Being behind on everything because of the layoff makes it very hard to pay this car payment every month. And that's an understatement.
We both think we need to get rid of the car, but how???
If he gets a good used car, it's not like trading this one would be a wonderful idea since there would be negative equity. But voluntarily turning your car back in? Don't you have to pay the difference in what's owed back to the bank? Even though this would be a blow to our credit, believe me, it would be worth it to save probably $300 or more per month.
DH is working for another dealership and asked one of the financial guys about this; they said that the bank would probably try to get the difference owed but legally they don't HAVE to get it from you because you gave them the car back. Or something to that effect. I have a hard time believing this. Seems to me like you'd still owe the money.
The only other thing I can think of is selling the car to someone who would be willing to take over the payments, but I have absolutely no clue how that would work. I'm also pretty sure no one would want to do that. However, I'd want to try that before doing something as drastic as turning the car in.
On top of all of this, we're shopping for new car insurance right now because our insurance is dropping dh. He had two accidents in two months' time--a total fluke. We've been with our insurance for 10 years and never made a claim. Now this happens and we're basically screwed. So he will probably get his own policy and I'll keep mine or go with someone else depending on what happens. So that's going to be another huge expense in addition to having to pay this car payment; more motivation to get rid of the car.
Sorry for the book people. But I feel a little better getting it off of my chest!
Take care,
Karen
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Old 03-01-2005, 01:43 PM
 
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how upside-down are you on the car?

I'd put a sign in the window and an ad in the paper. That's like 20 bucks usually.

Then I'd sell the car.

And I'd also call the dealer and find out what they can do (if anything)....can you trade this one for a used car, etc.

Car insurance -- just call around.

HTH

Kristin -- mom of Erin (11/5/02) and Leah (9/29/05)
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Old 03-01-2005, 02:08 PM - Thread Starter
 
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Hey there
The car is brand new.... I just looked up the blue book value and it's somewhere between 10 and 12K as a trade. So that's basically how far we'd be in the hole considering that's roughly half what the retail was for that car. This is why we were considering drastic measures. If we traded it for, say, a used car that was $4k, we'd still have a fairly large car payment. Less than now, but not what we'd want.
We've also been getting quotes left and right for insurance. For me the rates are good, for him it's very dismal so far.
Thanks so much for responding!
Karen
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Old 03-01-2005, 02:51 PM
 
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Hey Karen,

I just saw a story sort of similar in the dollar stretcher newsletter. Here's a link:

http://www.stretcher.com/stories/05/05feb28b.cfm
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Old 03-01-2005, 09:41 PM
 
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That is a really unfortunate situation... but as it says on the Stretcher.com site, you're not alone. You got caught in the iron jaws of the new car/negative equity trap. Ouch!

I bought a car last month and want to recommend a book that was my constant companion throughout the shopping/test-driving/purchasing process... it's called "Don't Get Taken Every Time," by Remar Sutton. He's a consumer rights advocate who did a ton of research on how the car sales business works, and how vulnerable the buyer is, and how to arm yourself with information ahead of time. (His research included evenings in bars getting the Real Dirt from real car salesmen, so I trusted him!!)

The book is fun to read - he organizes it around episodes in the sales career of "Killer Monsoon," a super-successful glad-handing car salesman. It's funny and the tone is very folksy: not "academic" or preachy, but more like having a savvy, down-to-earth friend explain it all to you. Full of great information about shopping for a loan, calculating the true price of a car, new vs. used, etc.

Good luck to you!
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Old 03-10-2005, 03:21 AM
 
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Quote:
Originally Posted by Karennnnn
..... But voluntarily turning your car back in? Don't you have to pay the difference in what's owed back to the bank? Even though this would be a blow to our credit, believe me, it would be worth it to save probably $300 or more per month.
DH is working for another dealership and asked one of the financial guys about this; they said that the bank would probably try to get the difference owed but legally they don't HAVE to get it from you because you gave them the car back. Or something to that effect. I have a hard time believing this. Seems to me like you'd still owe the money...
I don't know about the rest, but a voluntary repo is pretty much only one step better than a regular repo.
Suppose you owe $14k on your car. Suppose it books at $12k.
You turn over the car, and the bank sells it at auction.
They won't get much. I don't have the link but a car dealer showed me an auto auction history site once. A car you would pay about $12k for on the dealers lot, would auction for around $7000.
So now you have no car, and STILL owe the bank $7000.
You could either make payments or they can get a judgement against you and have it garnished from your wages. Not good.

The only thing better about VOLUNTARY repo, is if they have to hire a guy to come repo your car, you have to pay his fees too. They add it on to the $7k or so.

So you are better off keeping the car, making the payments. You don't want a repo on your credit (it is the SAME whether voluntary or not, on your credit) and you DO need a car of some sort.

We were there last month. Luckily we had another car that we weren't upside down on. Sold that car and cut back all around to be able to pay the bills. (Same situation too. When we bought the expensive car I didn't even want to but DH "had" to have it. He thought I was being pessimistic when I said we shouldn't buy it. Well guess what, now we're BOTH pessimistic, and we both agree that I am the boss about buying cars.)
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Old 08-14-2008, 04:46 PM
 
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Well I have actually seen this up close and personal, when DH and I were first together he had a Geo Storm, he bought it new off the lot. He fell on hard financial times and got further and further behind on payments(he also was a kid, so financial woes were not a worry for him).

He ended up being about 6 months behind, and they had tried to contact him(he didn't have a phone, they came to the house), his CRAZY roommate actually answered the door with a gun, WOW.....So they thought my DH was some lunatic when the repo man came, they were pretty freaked out, but my DH had no idea they had even come because of Mr. Crazy not telling him. Anyway when we talked to the repo man and found out if he gave the car back it would be the end of it, they just took it and DH talked to the finance lady and she was like "Oh I bet you want your car back," and he simply said,"No I really don't". She was pretty taken aback by this, and told him that it would be finalized that he voluntarily gave up the car, and that it would ruin his credit, but they would stop any and all actions against him. That was the end of the story.

FWIW, he did get another loan about 4 years later and there was no record of the car or the repo. We thought that was really weird.

I wouldn't recommend this, but this is what happened to us. We had another car(mine) so it really wasn't the end of the world.

Me Wife to T (14 years)Mama to Princess(4) and Monster Boy(my 1 year old ):
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Old 08-14-2008, 05:03 PM
 
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Originally Posted by Karennnnn View Post
Hey there
The car is brand new.... I just looked up the blue book value and it's somewhere between 10 and 12K as a trade. So that's basically how far we'd be in the hole considering that's roughly half what the retail was for that car. Karen
So - to make sure we all understand - you're saying that you owe maybe $24,000 on the car, but that it's blue book value is maybe $12,000?

WOW! That sucks. I tend to think you are better off selling the car yourself rather than going through the repo, but that's when I has more like owe $14K and it's worth $12k.

Third generation WOHM. I work by choice.
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Old 08-14-2008, 05:13 PM
 
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zombie thread...
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Old 08-14-2008, 06:05 PM
 
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zombie thread...
Yep, look at the OP's date- Feb 2005
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Old 08-14-2008, 08:48 PM
 
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zombie thread...
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Old 08-14-2008, 10:43 PM
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zombie thread...
Join date of today, and the only post is one reviving a long dormant thread to advertise an auto auction website? hmmmmm...
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Old 08-15-2008, 10:41 AM
 
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Anyone wonder what the op finally did with the car?

Equuskia in with Nodtveidt DD1 : DD2 :
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Old 08-15-2008, 02:00 PM
 
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Oh my I didn't even see the date, I'm such a nerd.

Me Wife to T (14 years)Mama to Princess(4) and Monster Boy(my 1 year old ):
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Old 08-15-2008, 04:45 PM
 
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Anyone wonder what the op finally did with the car?

"It should be a rule in all prophylactic work that no harm should ever be unnecessarily inflicted on a healthy person (Sir Graham Wilson, The Hazards of Immunization, 1967)."
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Old 08-15-2008, 05:04 PM
 
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Anyone wonder what the op finally did with the car?
lol, yep, I wondered Does she still post here?

Seriously?
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Old 08-15-2008, 05:12 PM
 
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Oh how funny!! I was all reading this like it was yesterday...not 3 years ago! UGH!

Cristina - "If you find it in your heart to care for somebody else, you will have succeeded." Maya Angelou
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Old 08-15-2008, 05:17 PM
 
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lol, yep, I wondered Does she still post here?

She hasn't posted since Feb '08.

"It should be a rule in all prophylactic work that no harm should ever be unnecessarily inflicted on a healthy person (Sir Graham Wilson, The Hazards of Immunization, 1967)."
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