So how bad is surrendering a car with a loan? *UPDATE*

[JulesMaximus]

Sell it and pay the remainder of the loan. Letting it get repo'd will just ruin your credit and the bank will still go after you for the remaining balance.

This

 

[Possessed Freak]

Learn from this. Don't buy new.

 

[ivan2]

turn the car into a taxi and drive it?

 

[jemcam]

It's actually not fraud if he actually drives it off of a cliff... It might be criminal for other reasons, but it's certainly not insurance fraud.

It is if it is intentional, which it would be. Here's a quick test. Can you tell the police and the insurance company the truth about what happened? If no, it's probably not legal. Intentionally damaging a car that you own is not illegal. Intentionally damaging a car so you can collect insurance is fraud no matter if you're in the car or not. It's really not any different than leaving it somewhere it's likely to get stolen with the keys in it and then reporting it stolen. You're talking second degree felonies here. If it's worth the chance, go for it. If you have a conscience, then pay off the loan and/or sell it.

 

[rudder]

Go drive it to the projects... with the keys accidently left in the ignition.

 

[alkemyst]

tough titty, said the kitty

QFT...turning it in you are going to get cremated by the bank up front and then by whoever they sell the debt too.

I have a reject of a relative that forged a car loan in my grandmothers name. When she realized she couldn't afford the $800 payments a month, she left it with the keys on the seat at the dealership one night.

They told my grandmother something like $12,000 was the shortage on the 3 month old vehicle. She paid.

Then they came after her because they couldn't get the price they hoped, reconditioning costs, etc. You are at their mercy depending on state.

 

[IceBergSLiM]

look up your states repo laws specifically Action to Recover Deficiency.

In CT:
Fair market value. “If the goods retaken consist of a motor vehicle the aggregate cash price of which was more than two thousand dollars, the prima facie fair market value of such motor vehicle shall be calculated by adding together the average trade-in value for that motor vehicle and the average retail value for that motor vehicle and dividing that sum by two. Such average trade-in value and average retail value shall be determined by the values as stated in the National Automobile Dealers Association Used Car Guide, Eastern Edition, as of the date of repossession. If the goods retaken consist of a boat the aggregate cash price of which was more than two thousand dollars, the prima facie fair market value of such boat shall be calculated by adding together the average trade-in value for that boat and the average retail value for that boat and dividing that sum by two. Such average trade-in value and average retail value shall be determined by the values as stated in the National Automobile Dealers Association Appraisal Guide for Boats, Eastern Edition, as of the date of repossession. In the event that the value of such motor vehicle or boat is not stated in such publication, then the fair market value at retail minus the reasonable costs of resale shall be determined by the court. The prima facie evidence of fair market value of such motor vehicle or boat so determined may be rebutted only by direct in-court testimony. If such value of the motor vehicle or boat is less than the balance due under the contract, plus the actual and reasonable expenses of the retaking of possession, the holder of the contract may recover from the retail buyer, or from anyone who has succeeded to his obligations, as a deficiency, the amount by which such liability exceeds such fair market value, as defined in this subsection. If the actual resale price received by the holder exceeds such fair market value, as defined in this subsection, the actual resale price shall govern.” Gen. Stats. § 36a-785(g) (2003). [emphasis added]


basically in CT if they sell it for less than Average Trade in value as determined by National Automobile Dealers Association Used Car Guide they are shit out of luck and cannot collect deficiency from you.

You will likely be reported late when you surrender the car and will have to request an investigation with the 3 credit bureaus to verify it was a voluntary repo and not actually "late" . This is a pain in the ass process but sure beats pissing away 500 a month.

EDIT: also this should be last resort. you must figure out how much you can sell it for now see if you can get a loan from elsewhere to cover the difference. This is alot easier and better in the long run. Last resort is voluntary repo.

 

[mrCide]

what year is it

 

[PricklyPete]

How about selling it and just ponying up the difference. Killing your credit is just a stupid idea....really stupid.

And you should have bought used. theflyingpig knows this.

 

[OILFIELDTRASH]

I doubt he can come up with the cash difference to pay it off if the car payment is that big of a burden.

 

[IceBergSLiM]

I doubt he can come up with the cash difference to pay it off if the car payment is that big of a burden.

500 a month on an unused depreciating asset should be a burden to most normal people.

 

[OILFIELDTRASH]

500 a month on an unused depreciating asset should be a burden to most normal people.

And it should be but he signed the contract. Should of got a lease or a much cheaper car. Not trying to be a dick but it's true.

OP keep the car. What happens if he needs a car for a different job and has ruined his credit by letting this one go?

 

[jtvang125]

It's actually not fraud if he actually drives it off of a cliff... It might be criminal for other reasons, but it's certainly not insurance fraud.

How is that not insurance fraud? He's destroying the car with the intent on getting reimbursed for the value of the car from the insurance company.

 

[boomhower]

Go drive it to the projects... with the keys accidently left in the ignition.

And your insurance company in most states will tell you to pound sand.


Back to the OP.
A repo is a repo. It doesn't matter whether you give it back or they come take it. The result on your credit report will be the same, your screwed for seven years. They will sell it at auction for less than half what it's worth and come after you for the difference. Take a look at the consumer credit laws in your state. $5k+ is worth it to a collection agency to take you to court if they can get garnishment. If you think a repo is bad for your credit you should try a judgement on for size. So now you have a repo, a judgement, and they are garnishing your wages. Sounds like fun huh? (Garnishment isn't legal in all states and the easiness of getting judgements varies from state to state) Get rid of the car the right way, sell it and pay the difference or keep.

 

[mrCide]

FYI there isn't some shitty 'repo' auction that these cars go to, they go from the dealership to the large auctions like all others. Manheim, etc. They won't go for half their value, especially a high mpg low cost Japanese car. I'm not saying it'll be worth what he owes, but $5000 is not likely. Depending on mileage. Here are numbers for a 2007 (first year I think) Versa:

For Week Ending Sep 24
Above Average Below
Sale Price $8,090 $6,806 $5,522
Odometer 30,315 58,409 86,503
Total Sold All 42

Newer would fetch more -- these are wholesale prices as well so you'd make more selling it yourself.

 

[boomhower]

You don't know what action it will go to. They will go to whatever dealer auction is local which can vary greatly. Being an action the resulting price can vary greatly. Long story short expect the worst. I wouldn't do a repo and expect the car to sell at a reasonable price.

 

[lurk3r]

Lol, full of fail, if there's a loan he can't sell it, he dosent own it the bank does. Do not default though, it will hurt you. Go to the bank, tell them you want out and ask what your options are.

I'm amazed you're paying $380 for a versa too ... they kept advertising those cars for $9999 and the Altima for $199 on a lease.

 

[AMDZen]

I'm upside down on the loan (a cheapie nissan versa, not a BMW - keep the snooty attitude about living beyond my means to yourself!)

Are you this naive? Buying a brand new car in and of itself was living beyond your means. Are you ignorant to how fast new cars lose their value? If you had bought a used car, even just 2 years old with 20,000 miles - you would still have the pros you wanted (high MPG, reliability) and not the cons that have you under water now.

 

[Colt45]

fake your death and make a new person, duh.

 

[PricklyPete]

Are you this naive? Buying a brand new car in and of itself was living beyond your means. Are you ignorant to how fast new cars lose their value? If you had bought a used car, even just 2 years old with 20,000 miles - you would still have the pros you wanted (high MPG, reliability) and not the cons that have you under water now.

Based on the question asked in the OP...I'd say "naive" is a kind way to put it.

 

[Cogman]

Are you this naive? Buying a brand new car in and of itself was living beyond your means. Are you ignorant to how fast new cars lose their value? If you had bought a used car, even just 2 years old with 20,000 miles - you would still have the pros you wanted (high MPG, reliability) and not the cons that have you under water now.

Have to agree with this. No matter how you slice it, new cars are a bad idea. Even a used car with 1 mile on the odometer will be significantly cheaper than a brand new car.

 

[caspur]

If you do want to total it and collect on GAP insurance for the loan difference, there are bodyshops that can do that for you, basically involves "destruction of high cost accessories" airbags, glass, etc. and leaving all major mechanicals so you get maximum salvage value. Your ins company will total based on % of cars value. Of course you need comp cvg, less ded....In NYC they are so worried about pip/liab fraud from the russians, the 1st party PD stuff is small potatoes.

 

[summit]

Sounds like those prices are private seller and those are always higher and you almost never get those prices. He's lucky to get $6k for it.

is he not a private seller? is he norm worthington or something? sell it.

btw you didn't need a new car. used would be just as good.

 

[Perknose]

Drive it off a cliff

We'll need notes outlining this procedure, but what to call them? :hmm:

 

[Homerboy]

You shoulda leased.