repo garnishment?

You should consider trying to sell it, since it will be in your best interest to pay the balance. After your car is reposessed, it will go to auction and be sold. Whatever money it brings will be applied to the balance. Anything after that you are responsible for. If you don't pay it, it's more than likely they will sue you for the amount, and you will end up being garnished for it eventually. Not only will this add a lot of extra money to what you already owe due to court costs and filing fees, but it will be extremely ugly on your credit report.

My advice to you is pay it off if you can, and then sell it. Believe me, you will be a lot happier that way.

Have you investigated the Lemon Law in your state? That sounds like a very promising source of relief, and it wouldn't impact your credit report at all.

Wulf is right on the Lemon Laws. Generally, any defenses you could bring against the dealer/seller, you can also raise against the finance company who bought that contract. So, if the car is legally considered a lemon, then you can raise that defense if they sue you.

However, if the court doesn't find that the car is a lemon, then it will find that you are still responsible for any remaining balance on the account after that car has been sold. If the creditor gets a judgment on those grounds, then they certainly can file for a subsequent wage garnishment.

You can never really tell "what the chances" of them actually suing you are -- it varied by company. Some companies won't sue for a small balance, so if you only owe them $1K or so then maybe they won't file a suit. However some companies will sue for $200 if you owe it.