Okay, here is my situation. My car has recently stopped working (damn piece of dodge!) and the mechanic told me it overheated and blew a gasket. The estimated bill to fix my problem is roughly $1500. I believe the blue book value of my car in its current condition is $3000 (fully functional I mean) so you can see why I’m reluctant to get it fixed.
The problem is, I still own about $4000 on the auto loan I took out when I purchased the car. After looking at all my options, I started to wonder if I should just stop paying this loan at all. I know eventually the loan agency will come and tow my car away and I will have a bad mark on my credit history. However, at least this way I can start saving that $250 a month toward another car. What I’m worried about are other, possible consequences I am not aware of. i.e. Would they go so far as to garnish my wages if they can’t recoup the losses from selling my car? Maybe even take me to court? This is only the second loan I’ve ever had so I don’t know much about the applicable laws.
So what do you guys think? I’m hoping for some feedback from someone that has been in the same situation as me. Anything from the highly knowledgeable people here would be great. Is there maybe another opinon I haven’t thought of? What would you do if you were in my shoes? Any help would be greatly appreciated.
If you go long enough without making payments on it, it’ll definitely be repossessed. Give it about three months, the aforementioned big red tow truck will take it off your hands.
However, I think you might face problems down the road. If I remember correctly (hopefully someone will correct me if I’m wrong), a repossession will show up on your credit report. That’ll do some bad things when you next apply for a loan.
Wow, I can’t believe how quickly yall responded! Don’t you people sleep? Anyways…
Right now in life I am not at a point where credit historys or reports affect me much. I live in a apartment with my mom and have no credit cards or much of a credit history. The whole concept of credit and lending sickens me anyways (and pisses me off >:)). I know after this experience I’m never gonna get another auto loan again. I would rather not get any type of loan ever again but I’ll have to see if this is possible or not. Is this something that will have long term repercussions though? I’ll hate to make a mistake while I’m young that I’m gonna regret 5 or 10 years down the road. I guess what I’m trying to say is decisions that look good in the short term are usually not good in the long term. That’s why I’m trying to get some info now while I have time to research it.
Please contact your lender or lien holder and make a good faith attempt to restructure your payment schedule. You’ll be amazed at how willing they are (in this dirt poor economy) to accommodate you. You must be willing to maintain and meet all payments agreed to under this plan. Otherwise, expect the credit report piranha to nibble your @ss into He||.
I’m a college student trying to hammer out my final 20 page paper of the semester. Sleep is an unknown abstration at this point.
As far as long-term repercussions outside of the credit history go, I simply don’t know. The only time I’ve been close to someone who had a car repossessed, the car still ran. The lending company simply took it back and, more than likely, sold it to someone else. Since your car isn’t running… ::shrug:: I don’t really know. I hope someone with more experience in this area pops in here. I hate giving people bogus information.
I’m still going to warn you about credit history, though. If I’m right about repossessions showing up on credit reports, it’s going to be there (and likely stay there for five to ten years). Sometime down the line you might need a loan for another car, a house, higher education, opening a business, or something else that’ll be a huge expense. A blemish on your credit report could keep you from getting a loan or forcing you to pay a higher interest rate on whatever loan money you do get.
Darn it, I hit submit too soon. I was going to offer you some advice on getting out of this jam, but Zenster has already said all that I could offer. We seem to be tag-teaming this thread at the moment.
Whatever you choose to do, cletus, good luck with it.
A job. A bad credit history can hurt your chances of getting a job. A lot of employers check credit history before deciding to hire someone. You might also find you need a loan in an emergency and you can’t get it.
This is generally a bad idea, but some car dealerships will take your existing loan and roll it into a new loan with another vehicle while you also use your vehicle for a trade-in. Of course, a non-running vehicle isn’t worth much of anything.
As someone above pointed out, renegotiating and making a good faith attempt to pay is far better.
I had a car repossessed when I was in my late 20s. I’m almost 47 now and have just started getting straightened out in the last few years.
Blowing up your credit ain’t worth it. Fix the car and sell it. Pay off the loan and start looking at another vehicle. You’ll be glad you did. Listen to Mother Kalhoun…she knows.
Sounds like you’re getting ripped off. $1500 for a gasket? That’s way way way too much unless you happen to have damanaged the head, valves and pistons. You can goto the local auto store and get a whole new engine for less then that! I think first you need to take it to another shop and get a second opinion, a head gasket shouldn’t cost more then 400-500 bucks and the other gaskets are easier to get to.
That said you can not stop making payments, well you can but it’s not a good idea.
Considering the source of my user name I desperately want to add something of substance to this thread, but damn if everything hasn’t pretty much already been said.
Oh wait!
The defaulted loan will appear on your credit report for seven years. If the lender decides to sue you and wins, the judgment will appear on your report for 10 years. Either of these will seriously mess you up in any attempt to obtain credit in the future, especially if you have no positive information on your report (credit card in good standing, etc.).
Actually, that sounds pretty common for a head gasket. I did a search here on that same thing a while ago, because my girlfriend’s car (guess what? a GM!) at 5 years old was showing signs of having a bad head gasket. She was quoted $1000. Most of this is labor. From what I’ve read, quotes on this generally range between about $700 and $2000, depending of course on the type of car.
I heard a good joke on the radio the other day. “If you get depressed and think no one cares that you’re alive, try missing a couple of car payments.”
Without knowing the model of car, $1500 is possible. If he blew the head gasket due to overheating, the head will probably have to get machined and probably replace internals in the head.
Parts will probably only be a couple/few hundred $$$, labor will be the killer.
Back to the OP: Do not do what you are suggesting unless you are willing to live with a serious blemish on your credit history for years to come. Things you don’t even think of like moving can be screwed as many landlords won’t rent to someone with crappy credit… I know I wouldn’t. Forget about getting decent credit cards or loans.
This is a big deal. Negotiate and pay the money you owe. It’s not the lenders fault and you owe it to yourself. Don’t screw yourself while you’re so young. You’ll regret it.
something you didn’t mention in the OP was the relative age of your car. if the car isn’t all that old (probably unlikely, given the balance that you still owe and the payment schedule i calculated you’ve made so far–but still…), could there be some manner of manufacturing defect that is responsible for the overheating/blown gasket? it could possibly be worth checking out. manufacturing flaws/recalls can occasionally mean the maker should make good on repair costs. FWIW.
otherwise…you’ve got just a year and a quarter of payments left (not counting repair expenses, granted). i wouldn’t blow my credit rating when the goal post is this close. maybe shop around to see if you can find a cheaper repair estimate. get it fixed. sell it and pay off the majority of the loan. take care of the remainder, then see if you can’t find something with a good track record regarding repairs (as in “lack of need for”). and good luck.
Let’s see, bad credit. Employers will check your credit. Want to get an apartment of your own? Credit check. Want to have the lights and phone and gas and whatnot turned on? Usually involves a credit check. And you will have bad, bad credit, as someone else said, for 7-10 YEARS.
DO NOT DO IT! Seriously. Not the allcaps.
I let a car go back for almost exactly the same reason when I was 23 years old. I am now 33 and I STILL have problems, although not as bad as they once were.
In a later emergency, I was desperate for a credit card, but nobody would give me one. I had to have my aunt co-sign for this lousy apartment. I was turned down for a city job strictly because of a poor credit rating, which was only poor because of that one situation.
If I could go back and do it all over again, there is not a doubt in my mind that I would have paid for the car repair. It was really my responsibility in the first place, not the lender.
Oh, and what they do is reposess and resell the car. You still owe the difference if they couldn’t get what you owed. I still had 1800 to pay after they reposessed.
would be great. Is there maybe another opinon I haven’t thought of? What would you do if you were in my shoes? Any help would be greatly appreciated.
Anyways…