Returing a veh i still owe on?

Question

So i thought i had it made with the job i had and decided to buy a car. I bought a used one from a dealership that turned out to suck cause i had to get it worked on like 3 times in the FIRST 3 MONTHS! So I returned it and got a brand new one. Still owing on the first this car came to way more than i expected. My car payment is $500mth. I want to return it cause it's beginning to be too much. The problem is I had to use my sister to sign for it since my credit history is too short (I do have good credit but i'd only been working for a year, first job). So she comes out as the owner and i'm the co-owner.

What kind of damage would this to her credit? (She bought a brand new car in 06 and is ahead in payments ) She said if i really felt strongly about no longer wanting to give away $500mth to return it. I really don't want to damage her credit history but I don't want to make $500 payments anymore....I WANT OUT!!

Would it be possible for me to get a car on my own once I return this one? (obviously something used and cheaper)

Answer 1

Okay - You sister is co-signer on your loan. This means she has accepted financial responsibility for the loan if you can't make the payments. If you turn the car back in to the lender, it is a repossession and they will exercise their right to come after your sister for the loan balance. A repossession will damage both you and your sister's credit for 7 years. This will make it difficult, if not impossible for BOTH of you to obtain credit: credit cards, auto loans, mortgages, etc., for many years.

You owe it to your sister to do whatever you have to do to keep making those payments. It will really cause problems for both of you if you have the car repossessed. You are irresponsible and your sister will suffer for it. You will no longer have the car, but the debt doesn't go away and you will still owe the money.

You agreed to the $500.00/month payments when you traded in the used car and rolled the negative equity into the new loan. That was foolish on your part. Your sister co-signing the new loan was foolish on her part.

I know my answer may seem harsh, but I don't think either of you understand what is at stake here. Do the right thing and protect your sister's credit by continuing to make the payments.

Answer 2

Ditto Insidebuy.  He is absolutely correct.  

Answer 3

its about a 50 point hit on her credit and you should buy cash

Answer 4

If you return the car, that's a voluntary repo. But a repo is a repo, whether it's voluntary or forced. And it will destroy your sister's credit for 7 to 10 years. Yours as well. Repo's are the kiss of death on a credit report. It doesn't matter how many points your score is lowered. What matters is that it's on there and it says you are irresponsible and too high a risk.

Even if your sister pays off her loan on time and is never late with a payment, she'll find it impossible to get credit again for at least 5 years because of that repo, if not more. It doesn't matter that you are the one that defaulted. She's still listed as the primary party. After five years, she may be able to convince a lender that she's stable and made one mistake in co-signing. If that doesn't work, she has 2 to 5 more years of being turned down.

And you ... you can kiss any hope of getting another car goodbye for at least 7 years, if not more. You defaulted on your very first car loan. Nobody will take another chance on you. If you try to get another car first, then turn in the car you have, that won't work either. The lender is going to turn you down since you don't need two cars.

Once your car is repo'd, it immediately goes on your credit report. It's not like other reporting that can take up to 30 days. You and your sister need to re-think the consequences of what you're about to do. Because both of you will pay severly for it.

Answer 5

Don't do it, you are s******g not only yourself, but your sister whom in good faith offered her good name to help you.  Giving the car back would be the worst choice.  You can try to retail the car and work something out with the bank to pay off the remainder, if that doesn't work, you'll have to suck it up and keep paying.  Do not s***w your sister.