Belt Auction

How will a voluntary repossession affect my credit?

I took out an auto loan for my brother to get a car last Feb. He failed to pay, so I took the car back and have been making payments for the last three months. I've listed the car for sale several times on Ebay, in the local newspaper, and now on autotrader with no luck so far. I have a new car myself that I am also paying on. I don't need two cars and I can't afford to keep paying for two vehicles. How will a voluntary repossession affect my credit since I am paying for another vehicle? Will it repair itself as long as I am paying on another car? I know that the bank will auction the car. If I pay the deficiency, will the repossession still go on my credit? I have very good credit and I really don't want to ruin it, which is why I've paid on the car for this long. I am in the market to buy a house. Will a repossession affect my getting a home loan?

Public Comments

1. yes it will try to continue making payments if possible until you can sell it
2. The repo will affect your credit regardless of you paying on the other car. Better to take a loss on the car and sell it than to let it get repossessed. And yes, it can affect you getting a home loan.
3. Well ,your in trouble now ! ,forget about buying a house for at least ten years !. You can ask the car dealer to set a one time payment ,eather pay the outragious amount,and lose the car or, have your brother assume the debt .unfortunately you wont even be able to apply for a credit card or a loan without this showing up .it will likely be about two thirds of the cost of the car .good luck ! your screwed !. remember!''no good deed goes un punished''.
4. The answer is yes. A repossession of any kind, although voluntary, will negatively affect your credit. After repossession, the bank will most likely auction the vehicle in a dealers only auction. It is very unlikely that the vehicle will for sell any amount near the vehicles true value since the dealer intent is to resell the vehicle and make the most profit possible. You are definately on the right track by trying to sell the vehicle since you will most likely be able to sell the vehicle for a higher amount. If you find that the financial strain of trying to pay for both of vehicles is affecting your other finances, you may want to voluntarily surrender the vehicle before if does any additional credit damage. You may also try to find someone else to take over the vehicle payments by doing a "transfer of equity". This would add another credit worthy party to the original contract. This would not, however, negate your responsibility to pay for the vehicle. Your name will remain on the loan until it is either paid off or has been refinanced with another bank. This is a risky option since if puts you back in the position of hoping that someone else will make the payments responsibly. I would suggest that you continue to try to sell the vehicle at a loss if necessary. You may want to try to sell or refinance the most expensive vehicle before hand just in case it takes longer than expected to sell the vehicle. I hope this helps. I'm sure this may go without saying but you should never co-sign for a vehicle unless you are able to afford the vehicle yourself.