Mar
13
How bad would the repossession by ‘we finance auto’ affect my credit?
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I had to buy a used auto from ‘we finance’ like early this year due to no credit establishment. And I have been ****** paying over 200% of the blue book price. And I don’t want to keep paying that because financial situation these days is not really good. If I stop paying monthly payment and they repossess the auto, how would it affect my credit and what else is expected to happen?
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6 Comments
March 16th, 2009 at 2:15 am
It would depend if the dealer reported you to credit reporting agencies. If you don’t want to continue with the deal, contact the dealer and offer to bring the car and the keys back without badmouthing him. Maybe he will call it square if you are cooperative.
March 18th, 2009 at 10:20 am
This would have a huge negative impact on your credit. If you want to get out of the loan and forfeit the car, you can arrange a voluntary surrender where you basically go through the reposession without having to actually go into default. You’ll still have to make some sort of financial settlement but if you go into default, they’ll take the car and still come after you for the unpaid portion of the loan. So it is cheaper for you to do a voluntary surrender. That will still have a negative impact on your credit but nowhere near as major as a repossission.
March 21st, 2009 at 12:27 am
7 years is normal for ‘black marks’ on your credit for evictions, repossessions, etc.
Businesses like that prey on people with low finances, etc. They’re vampires…but they didn’t force you to buy from them, so you must recognize your responsibility.
If you are under 21, you might be ‘off the hook’ because, legally, the contract with them is not valid: you’re a minor.
IF your finances improve, try to work something out with them.
March 23rd, 2009 at 5:25 am
If they report a repo, and with no positive credit and only a repo your credit report, of course your credit rating would be terrible. Go to FTC.gov and pull a free copy of your report. You can see if they are currently reporting the loan. If so you can be assured the repo would show up, if not they then that means they may not report payment history, but they could report a default or judgement. The same way a cell phone company or utility would do.
Try to negotiate a settlement to pay off the loan, maybe they give you an X% discount for a lump sum payment. Get EVERYTHING in writing. And even then who knows what could happen. Actually I would only pay them through an attorney or CPA, ie they give the attorney the title and you pay the attorney, who signs over the title to you and pays the dealer.
Be careful, simply asking for a settlement can be considered a default, so they could repo the car.
If you default they repo the car will “auction” it for some fraction of the value and then try to collect the deficency balance from you, with interest and fees. Trust me they are the experts in this game, they know exactly what they are doing and have seen any and everything you could think of.
March 25th, 2009 at 8:39 am
if they did reposses the car, how would you get another? if they did repo the care they would sell it & use proceeds to pay on the loan balance. then whatever loan balance is left over you will still be responsible for. it takes a very long time to get this off your record, i’d say maybe 5 - 7 yrs. but with the passing of time and a better, income, etc. you will find companies willing to give you another chance for a loan. but people who have the worst credit will always pay the highest interest rates. so keep this in mind too.
March 25th, 2009 at 7:13 pm
Since you bought the car from a “buy here pay here” place, your credit wasn’t good to begin with, and if this one gets repoed that will totally destroy your chance to buy another car. Most of those places give you a chance to rebuild some credit, and the repo will show lenders you’re a very bad risk…one few if lenders would take.
I know it stinks, but keep the car if at all possible, and try for a conventional loan when this one is paid off.