I am $5900 upside down in my car. what can I do. How bad will my credit be if I give it back?

Question

I am so far upside down I am stuck in my car. what can I do??

Answer 1

Look at it this way. If you give it back you can be certain that your next car payment will be $150 or more higher per month because of the high interest you will have to pay to get someone to loan you the money. You will, in effect, be paying that $5900 one way or another. Also, if you give the car back the creditor can still sue you for the unpaid balance after disposing of the car. So you would end up paying twice.

Keep the car and continue paying until you get even in it and strive to make a better purchase decision next time. Buy a Honda, Toyota, or other car that keeps its value better. Keep your cars longer, put down more money when you buy, etc, etc, etc.  

Answer 2

SELL IT OR BURN IT...

Answer 3

I would talk to your local bank or credit union about a split loan.

that is where the refinance you on 1 loan for the value of your car and then the remaining over amount they finance as a Signature loan, true you will have two loans but it will be cheaper and save your credit.

you also might try paying with direct deposit.

I have a portion of my check direct deposited to cover payments for my cars. They give me a cheaper interest rate.

Once the loan is refinanced you can sell the car.

Answer 4

All you can do is keep it and try to pay it off. Turning it back in will ruin your credit. It will show a repossession for ten years on your credit.  

Answer 5

Auto finance is what I do for a living and believe it or not $5,900.00 is nothing. I deal with people that are twice that upside down every month.

With the huge rebates out there it should be no problem getting you right side up.

But whatever you do, do not let the vehicle go back, the lender will sell it at auction for far less then it's worth and come after you for the balance plus all fee's for towing, storage, reconditioning, auction, interest, lawyers and anything else they can think of.

This will amount to several thousand dollars and they can take you to court, get a judgment and at that point they can attach bank accounts, garnish wages (if your State allows it) and file liens on any other property you may own like cars, boats, land and homes.

All of this will show on your credit for the next 7-years making it very hard to get any other types of loans without making massive down payments, paying huge fee's and State maximum interest rates.

If it really comes down to it you would be better off selling the vehicle and taking out a small personal loan for the balance this way you could lower your payments and save your credit.

Good luck.

Answer 6

There's no nice way to say this so I'm going to make it short and sweet.

I savvy car buyer will never be upside down on a car loan.  The only way to be $5,900 upside down in a car loan is by making a poor decision during the purchase.  Did you decide not to put any money down?  I bet you won't make that mistake again.  Did you roll in an old car loan that was also upside down?  Ditto for that mistake.

You cannot "give it back".  You're thinking of what some people inaccurately call a "voluntary repo".  In the real world there is no such thing as a voluntary repo.  A repo is a repo, voluntary or not doesn't make any difference in your credit report.

You said it in your own question.  You're stuck with that car until you build some equity.  Start paying as much as you can on the loan if you really need to get out of that car.  Also, sell the car on your own instead of trading it in--you'll get thousands more.

Stop shopping for cars.  You'll find someone that can get you another really terrible loan just to get you out of the car you're in now but you'll be in the same boat once that car starts to fall apart.

Answer 7

You could keep making payments until the balance gets closer to the value. Sometimes they can roll the negative equity into a new car loan.

If you "give it back" you'll be screwed.