Should I voluntarily surrender my vehicle?
I have a 2015 Impala with close to 120k on it. I am about 7-9 grand upside down, effects of an 18% interest rate, and still owe a considerable amount of money on it with 3 years left to pay. I am starting to experience the earliest stages of transmission problems. Trading is out of the question, as I have been to about 15 dealerships and its the same thing every time. I was randomly pre-approved for an auto loan through my credit card company. I could get a brand new vehicle with about a 10 point lower interest rate. I am afraid of how the surrender will effect my credit. When I got the car, I didn't know anything about interest rates(CARMAX) and I just got it, I don't think I even asked. Now, I am older and more educated. What should I do??? Caveat to the entire thing....i would like to buy a house in the next 2 - 3 years. Any and all advice will help....Thanks.
- GLv 55 months agoFavourite answer
Buy the new car first. Then maybe the Impala could catch fire.
- Anonymous5 months ago
Sure. save yourself the repo fee. That way, instead of owing $9200-9300, you only owe $9000 and have 7 years of bad credit.
All fun & games.
- A HunchLv 75 months ago
If the "pre-approval" is an actual approval (i.e. income check has been done, etc) then buy the new car and return the old car.
This will kill your credit:
- at best you will owe income tax on the $7000+ underwater amount plus fees for their attorney, selling the car, etc.
- at worst they come after you for the actual money the returned car is costing them.
- EvaLv 75 months ago
Surrendering it will kill your credit. IF the finance company allows you to default on the loan balance, you will also have to pay income tax on it (didn't know that, did you). You could have refinanced the car at any time, and that's probably what you should do now. Have it looked at to see if the transmission could be a minor repair. You won't be able to get a mortgage in 2 or 3 years with that hit on your credit. You need to pay if off somehow.