A friend is over their head in debt and is thinking of letting the finance company take the car back. They would not be able to sell it as the loan payoff is higher then the car’s value. They realize the impact to their credit. But the payment is withdrawn from their banking account each month. Are they able to just stop those withdrawals or is it a joint agreement with the finance company and both would have to agree to do this?
Dennis
The answer is probably “it depends.”
I’m going to guess that your friend has done one of two things:
In either case, he probably can go onto whichever web site on which he set that up, and turn off the automatic payments.
If he set it up on the finance company’s site, it’s possible, I suppose, that they may not allow him to turn off the automatic payments without setting up an alternate payment method, but that may be as simple as telling them, “I’ll just do one-time payments each month, here on your web site.” It’ll all depend on the particular policy of the finance company.
If he set it up on his bank’s web site, the bank likely has no idea how much is left to be paid on the loan; it’s likely that all they know is that he’s told them to pay $X each month to someone, and shutting it off shouldn’t be an issue.
I tried to end an automatic payment for a scam pest control company. The bank told me I couldn’t because I used a debit card. However, I could have had I set it up using my account and routing numbers for the same account.
Uhh, what?
Just report that you lost the card/think it might have been stolen. This will cause the bank to reissue the card to you with a new number. This will break all recurring payment agreements.
This doesn’t help the OP, but sometimes recurring payments will auto transfer to the new card number. I had the same card reissued due to fraud twice in 3-4 months. The first time they said my auto pays would transfer, but they didn’t. The second time they didn’t mention it, and everything did auto transfer. So, shrug.
Your friend should contact CarMax ASAP. I work in auto insurance and it’s become frequent to hear of people selling their car to CarMax while it was still in good shape b/c they feared it being repoed as they couldn’t afford it. They still lose money, but 4 figures instead of 5.
Mostly right, the answer is “Yes”
One might get a discount from the financer for automatic payments.
Depending upon the bank & their platform you could have set up the payment for x [del]months[/del] payments. The only issue is if your final payment is a partial one. However, you could probably setup a one-time payment for that one, partial payment months in advance. Again, it depends upon your bank’s system how far in advance you can set that one up.
The auto payment with the lender may have been a condition of the loan in the first place. If so, then no, they will not be able to shut off the auto draft. An extreme solution could be to close their bank account and open a new account at a new bank.
Well, you can always just close the account and go with a different bank. Nobody can stop your friend from doing that.
Huh?
How does one sell a car to CarMax without having the title?
Selling to a dealer, like CarMax, without title in hand is no big deal - assuming one owes less than the sale price. The dealer would cut a check to the lien holder for the payoff amount and any remainder would go to the individual(s). The problem in the OP is that the subjects owe more than they could get for the car, in which case they would have to pony up the difference to the dealer out of pocket.
To the OP, the answer is “yes”, the payment can be stopped. It can be as simple as a visit to the appropriate web site or as complex as closing the account but it can be done.
I was wrong, it’s Carvana that is known for that; but CarMax also will in the same way Dr Jackson describes. CarVana pays off the note, the person selling the car to them pays CarVana the difference.