So it happened. You or someone you know took out an auto loan on a vehicle and everything was going great until something changed and now you cannot afford to keep it. It happens but what can you do about it? Can you return a car and how does one go about it without causing even more problems?
Returning your car, also known as a voluntary repossession, is possible. Although like the name suggest, the effects can be just as painful as repossession to your credit. Consider all your options and the effects that they can have before you decide to return your vehicle and take that credit hit.
Other Options Available
So what are those other options available to you before you voluntarily surrender yourself to repossession? Well the bank or lender may still be able to help you if you out if you can't afford the payments anymore. And if that doesn't work you still have a few options as well.
- Payment Deferment
If you find that you can't afford your monthly payments right now due to a situation such as job loss, deferring your loan may be a good choice. When you choose to defer, you are simply putting your loan on hold until a set time. Usually lenders will give 1 to 3 months depending on the situation. The payments will just be tacked on to the end of your loan.
- Selling Your Vehicle
Maybe your payments are just too much, or you just don't want the vehicle. Well one option then would be to sell your vehicle. The difficult part is that you will need to sell the car, truck or SUV for as much of the worth as you can. However, to satisfy the loan, you may find that you'll have to front some of the cost yourself.
- Refinancing Your Loan
Perhaps you've had some unexpected costs come up and you have to rearrange your budget. A good option is to look into refinancing your auto loan. By extending your loan you can lower the monthly costs. Plus, depending on how long you've been paying you have probably improved your credit score, which will help lower your interest rates.
As We See It
Returning something you cannot afford may work in some cases. But when it involves a loan agreement, there can be more of a negative outcome than a positive one. Our team here knows that times are tough. But at Auto Credit Express, it is our number one goal to help you improve the quality of your life. We do that today by bringing you the best options when it comes to financing or even refinancing your car. So before you make any rash decisions, be sure to consider all the options we've shown you and know how they will affect you afterward.