My BF is currently up to date with his car notes, however since it is a truck (2007 ford f-150 lariat) its wastes way too much gas especially with the gas prices these days… at the time he bought it he didnt know the gas was going to be jacked up the way it has.. anyway right now he is struggling to pay his truck but is managing to be up to date… he does not want it anymore so today he took it to the dealership where he bought to see if he could trade it in.. the sales man told him it was not possible because at the time of purchase his truck was worth $30,000 now its worth about $15,000 and he adviced him to call the bank and tell them he doesnt want it and that he voluntarily is giving it back and it wont count as a repo.. I said “yeah if only it was that easy” i’ve researched before and I know they take it back, count it as a repo, damage your credit, sell the car at auction, and then make you pay the difference. . am I correct? If so what othe choices does he have?… Thanks
Originally posted 2009-08-08 15:40:37.
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Yes, you are correct. That is called a voluntary repo. Your bf has no choice. Either he pays for the car, or has it repo’s. The bank will not cover the loss. It is his responsibility
You are correct. A voluntary repo has the same effect as an involuntary one. If he can keep it, he should try – even if it means a second job.
You are absolutely correct. They will do exactly what you just described.
The car salesman is also correct in that its worth much less than what he paid for it.
Either try and sell it for what he owes privately (which is gonna be hard) or go to a small credit union in your town and have the thing refinanced. You’d be surprised at how much you can save.
The company that financed the vehicle will repossess it after he’s 3 months late on payments. Well, thats how long it used to take, they may give a lil more leeway than before in this day and age.
So the loan is through a bank and not Ford? If it is through Ford(even if it isnt) call Ford and explain to them that its just to hard right now to keep up with the payments and ask if there is anything they can do to help. My wife and I had to do a similiar thing with G.M. and they deferred our payments for 6 months. It helped immensely. Even though interest still accrued on the note. I will always buy G.M. just because of they way they helped us.
yes you are correct a voluntary repo is still a repo and he will be responsible for the difference when they sell it at auction. Only other choice is to continue to pay on it. He may have to get a second job to make ends meet.
Sometimes a car-purchaser will realize that s/he cannot afford to continue making the payments, and will voluntarily return the vehicle back to the creditor. Unfortunately, this will still be listed as a repossession on the consumer’s credit records (a seriously negative item), and there may still be further liability. It is not as simple a “walking away from it.”
Cars, especially new ones depreciate (become less valuable) very quickly. A new car may suddenly lose $2000 in re-sale value the moment you drive it away from the dealer. Also, during the early part of the repayment period, most of the payments are consumed by interest charges, so the consumer’s equity will grow very slowly. The loan often becomes greater than the resale value of the car.
Repossessed cars are typically sold quickly and cheaply at auctions, for amounts that will not cover the balance owing on the loan. The difference between the actual sale price and the higher loan balance is known as the “deficiency”, and the consumer who defaulted on the loan is liable for this amount. The creditor may then file a lawsuit and obtain a “deficiency judgement” and go after the consumer’s other assets, such as bank accounts, and may garnish his/her wages. This can happen even if the consumer had voluntarily returned the car.
If you are delinquent (or are about to become so) on vehicle payments and are facing imminent repossession, you may be able to protect your credit rating by finding another person to take over the loan (with approval from the creditor.) You will have to give up the car, but will lessen the resulting credit damage (although there may still be late payments showing on your credit files.)
Hope this answer is of help to you
LEGAL DISCLAIMER: The answer provided here is intended for informational purposes only. It is not intended nor presumed to be legal counsel or professional legal advice
surely the truck can’t only be worth $15K, I had a 2002 F150 4X4 lariat, that i paid $60K b/c it was special ordered and I just traded it in for a 2008 and got $24K for the truck, apparently the dealership is not wanting to make a sell, go to another dealership.
The F150 has great gas mileage, but if he is over driving then that is why he is having problems with gas, I personally fill up my truck every other week $80.00. but i don’t waste gas by driving excessively.
Try another dealer.