Overhaulin'

Surrender (REPO) my PIece of crap Upside down loan Car, or fix it and deal?

I am in a VERY bad financial situation. I have a good job, make good enough money, but am struggling to pay off debt daily. I am in an upside down car loan, $8000 upside down. Not to mention I have 4 years left of payments and the car is falling apart. It is a VW so to fix it currently I need to put $1500 into it. If anything else breaks I am screwed. I recently went to a car dealership and they suggested I surrender (repo) my car and use the $1500 I have to get a newer one that gets better gas milage and has a lower monthly payment. I would love to do this, so I can pay off my debt faster, but am terrified of having a repo on my record. Basically I have 2 options. 1. Keep the car, fix it, pray nothing breaks, and pay off my debt in 4-6 years 2. Surrender the car, get a cheaper one, pay off my debt in 1-2 years. If my debt is clean, and my payment history is good, including paying off the balance of the repo, how bad will that mark effect me and for how long?

Public Comments

1. I had a similiar problem, I let them have the car back. I still owe $6000, but I am not paying the bank. I gave the car back. This was 4 years ago. My credit score is climbing back up slowly. Pray nothing breaks is too much of a gamble. Honestly you got swindled, and either way you have learned a lesson.
2. I see an option number 3 as well. Put the $1500 into fixing it and then sell it privately or trade it in on another vehicle. I would not let them repo for 2 reasons... 1. It WILL affect your credit for 5-7 years. 2. If they repo they will sell at auction for whatever they can get for it. You will be liable for the difference and therefore they can take you to court and make you pay it anyway. Plus you have to pay for another car. Option 1 is an option. Take it to a mechanic for a comprehensive report on what needs fixing. A mechanic would be cheaper and unbiased compared to a VW service centre. They may be able to use generic parts as well. Either way, I would not let them repo it if you can help it.
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