CAR TOTALED WHILE UNINSURED

Everybody's Uncle,

Hello, I have a 2000 Chrysler Cirrus.  In 2003, the car was in an accident while uninsured.  I have continued to pay the car note on time every month.  The place where I had the car stored has told me I must move it.  I called my finance company to see if I could donate the car to salvage they said no and that they would send someone to look at it and do a damage estimate.  Today I called to find out and they told me the car was totaled and they were coming to pick it up and it would go down as a voluntary repossession on my credit. 

I told them I have no problem with it being picked up but why a voluntary repossession?  I am still paying the car note on time each and every month and had intentions of doing so until the car was paid off.  This will ruin the credit I have so carefully cleaned up over the past few years. I cannot get them to change their mind nor can I get them to not take the car from me. They have told me this will be on my credit for 7 years.  I owe them $7,000 on the car. Since they are in effect screwing me for the next 7 years, I have decided to pay them $1,000 a year for the next 7 years, since I will be ruined anyway.  What if anything can be done in my situation? and What will be the repercussions of my dropping the $450.00 per month payment to $100 per month to stretch it out for the 7 years that it will be listed on my credit?  Please answer soon.

(Unsigned)

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Dear Unsigned,

Voluntary repossession seems inappropriate in this case. As long as your payments are current, I see no reason why the finance company would want to take possession of the vehicle.

The place of storage has the right to charge you for storage. Don't allow those charges to mount up.

Have you tried contacting a "junk yard (Salvage Company)" to get a salvage value? The fact that a car is "totaled" does not necessarily mean worthless. It simply means that the cost of repair is greater than the value of the vehicle if it were repaired. Windows, usable body panels, tires, chrome, water pump, battery, etc. have some value.

The question remains:
Why would a finance company want a valueless car?
They could sell the car (as salvage) and still charge you for the amount remaining unpaid. You are not relieved of the obligation to repay your car loan because you agree to voluntary repossession.

In your position, I would sell the car directly to a salvage company and use that money toward your debt due the finance company. Since you are willing to continue paying your monthly installments, there should be no harm done to your credit rating.
Under these conditions I become curious about the finance company's interest in a "totaled vehicle" - very curious!
I would take the finance company out of the loop. Sign nothing until all options are considered. If anyone takes a car without permission or legal authority they are treading on thin legal ice - very thin!

Do not implement your $100 per month plan. This will save you nothing and create a seven-year record of poor credit performance. That will harm the record that you have worked so hard to established.

The situation is bad enough, don't self-destruct as a "solution."
Everybody's Uncle.