VOLUNTARY AUTO REPOSSESSION
Everybody's Uncle,
I bought a Chrysler PT Cruiser at the beginning of this year something that I have wanted to have for a long time. I went and bought it and am now in a financial downfall. I have been wondering how I can go about getting my car voluntarily repossessed? If you can help me gather this information I would greatly thank You.
Sincerely,
Jennifer Truswell
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Dear Jennifer,
Before you opt for voluntary auto repossession, be sure you understand the process.
Turning in the car might not relieve you of your financial responsibility. Voluntary repossession, unless you totally understand the fine points, should have the overview of an attorney.
Let's assume you owe $20,000 on the subject vehicle and allow repossession. The lien holder, balancing ethics against his brother-in-law, might sell the car at a price lower than $20,000. Usage, wear, mileage, damage, storage concerns, insurance, his brother-in-law and other things might result in a sale price lower than the amount you owe. Let's say $15,000. You still owe the $5000 difference. Now you owe money for a car you no longer own and are in need of transportation.
Repossession shows poorly on your credit rating.
Consider other possibilities.
Check several sources on the Internet and in publications that estimate the wholesale/retail value of your car. You may be able to sell the vehicle privately and be much better off.
Cars are depreciating assets. The worst depreciation usually occurs on the day of the purchase and in the year that follows. If you bought the car with little or no money down, you may have negative equity (you owe more than the car is worth). If you made a substantial down payment, the car might be worth more than you owe or allow you to sell and "break even."
Refinancing, if possible, might reduce monthly payments.
Working extra hours or part-time on the weekend can add income.
Sell other assets.
Draw from an IRA or 401(k). Taking a 10% penalty is probably the lesser of two evils.
If your financial difficulties are curable over the short run and you have room on a credit card or access to other funding, look for an alternative. Avoid repossession, there are too many negatives.
Everybody's Uncle
