Key Takeaways Unexpected financial situations may affect your ability to make car payments, putting you at risk for repossession. If you financed a vehicle purchase through the dealer, they may have specific rules about when you can and can't return a car. Leasing agreements may include clauses for returning a vehicle early, though you may pay a penalty to do so.
Returning a car you financed may have negative impacts on your credit score. Note Lemon laws are different in every state so if you're attempting to return a vehicle on the grounds that it's a lemon, be aware of what time limits may apply for doing so.
Tip Ask about any penalties or fees you may have to pay for voluntary repossession and how it will be reported to the credit bureaus. Tip Consider using an online car loan refinancing calculator to estimate your potential savings with a new loan. Important Read your loan agreement carefully to determine whether your lender allows for someone else to take over loan payments. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.
We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Related Articles. Car Insurance How to Buy a Car. Partner Links. Gap insurance protects car owners when the compensation received from a total loss does not fully cover the amount still owed on a financing agreement.
Understanding Down Payments A down payment is a sum of money the buyer pays at the outset of a large transaction, such as for a home or car, often before financing the rest.
Closed-End Lease A closed-end lease is a type of rental agreement that does not require the lessee to purchase the asset at the end of the lease. What Is Comprehensive Insurance? Comprehensive insurance is car insurance that covers damage to your car from causes other than a collision. Learn about comprehensive insurance costs. Introduction to Auto Insurance Auto insurance is purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Discover more about it here.
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I Accept Show Purposes. Try to have a thorough understanding of your finances and the amount you're able to pay before you accept a loan. If you're thinking of taking a loan now because of a promised future financial situation — don't do it.
Plan according to your finances as they stand now or wait until that future "better-off" situation arrives. Getting behind on payments or finding yourself with an upside-down car loan can be a very stressful situation.
Sometimes it just happens, but it's often completely avoidable. If you find that you're confused about certain aspects of your financing plan or how much of one you can handle, North Coast Auto Mall - Akron is here to help clear the air and answer your questions. Skip to main content. Search Inventory. Call Us Map Search. Sales Dept. Selling Your Financed Car One of the problems with selling a financed car is that you have to pay off the loan before you can transfer the title over to the next owner.
Voluntary Repossession Your last option is to have the vehicle voluntarily repossessed. Refinancing Your Loan If you're considering returning your financed car because you can't afford the payments, talk to your dealership to see if you can refinance your loan. Talk To the Experts at North Coast Auto Mall - Akron It's important that you are familiar with the terms of your loan and financing plan before you accept it. When you're ready to start shopping for your next vehicle, either to buy or to lease, our professional team at North Coast Auto Mall in Akron, Ohio, has you covered for that as well.
If you're giving the car back under the assumption that the creditor will write the loan off, think again! The creditor can still sell the vehicle and sue you for any deficiency. So, carefully weigh your options, and the pros and cons of each, before you take action.
If you return the car to the lender, the lender will likely sell it. It will apply the proceeds of the sale to your car loan balance, after reimbursing itself for the costs of sale and certain fees. However, often the sale proceeds aren't enough to cover your loan balance; the remainder of the loan amount is called the " deficiency. The car loan lender can then demand payment of the deficiency.
If you don't pay up, it can sue you, get a judgment , and then use various collection methods , such as wage garnishment or bank levies , to get paid. If you still want to surrender the car, you can try to work something out with the creditor, like negotiating a reduction or waiver of the loan balance as a condition of returning the car.
After all, you're saving the creditor the time and costs of a repossession and auction granted, most of those costs would still be passed on to you anyway. There are two main options available to you if you need to get yourself into a different vehicle and they are to sell your current vehicle or trade it in. Selling Your Financed Vehicle — your first option when it comes to dealing with a car you still owe money on is to sell it.
You have the option of selling your car privately or you can reach out to a dealership that may be interested in purchasing your vehicle.
Sometimes you may owe more on the vehicle than what you can sell it for. In these cases, you are still responsible for paying off the remainder of your loan. Trading in Your Financed Vehicle — if you are looking to get into a new vehicle but still owe money on your current vehicle, trading in your vehicle is a great option.
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