Broken down car owe too much to pay

You could just let the finance company repo it, but then you would be responsible for the deficiency balance after they sell it. That probably would be considerable if it is inoperable. Your options after that would be to hope they do not sue before the SOL runs out, let them get a judgement, and deal with possible wage garnishments and benk levy's, or filing bankruptcy. None of them are too appealing, but if you can't afford to make the payments, then you have little option.

most finance companies sell their repo'd vehicles at a dealer auction, if you are lucky you might get 30 to 40 cents on the dollar. but with a broken transmission probably not even that. have you had somone look at it and tell you exactly whats wrong with it? if you cant fix it and cant afford to pay it best bet is to call the finance company and explain your situation. you can set up a voluntary surrender if nothing else. depending on the finance company and your area they will assign it to an agent in your area and they will schedule an appointment to pick up the vehicle. chances are the deficiency balance will be sold to a 3rd party agency before the primary lender tried to collect on it. i cant speak for every finance company because they all might go about it in a diffrent way, i just know thats what would happen based on the finance company i work for. good luck.

It mainly depends on the cost to put the vehicle in good condition and/or how much the vehicle will sell for at auction either way. IE if it's a 2008 van, and after $2K to put a new transmission it will sell at auction for $15K, then it's worth taking back. If it's a 1992 clunker, then its not even worth fixing, and will sell at auction for maybe $50.

As a lender, when I know the car is worthless, we don't even want the car back. It costs us $300 to repo-- so that we can turn around and sell it at auction for $50 ... why would we want to do that? (it's called "throwing good money after bad money")

Many times I tell our customers to keep the car, but they're still responsible for the loan balance and, if not paid, we'll probably file a lawsuit.

I am in the same spot you are in! The finance company just took our car this week. If they do end up trying to sue us we are going to file bankruptcy.

I love that mentality. Don't get me wrong, I'm not here to harp on anyone. But everyone who knows me here knows that I run a finance company, and my perspectives usually come from the standpoint of a lender..... so I will just shed my perspective.....

You wanted a car, and you couldn't/didn't want to pay outright for the full purchase price of the vehicle. So you obtained financing. The lender wrote a check to the car dealer for the cost of your vehicle less your down payment. IE they paid for your car for you, and all that money left the lenders bank account.

Now the car doesn't run, and you don't think you should have to pay the lender back for the original cost of the vehicle. Is it the lender's fault that the car stopped working?

Lenders are not in the business of buying and selling cars; they're principle business is making loans. They don't have repair shops or mechanics on staff that can fix your car; they don't have a body shop that can fix all the dents/scratches you put on the car; they don't have a detail shop that can shampoo the carpets/seats to get all the stains out; and they don't have car salesmen that can finagle a buyer into paying premium dollars for a piece of junk.

Everyone thinks the lender is such a big bad wolf because they sell the car to the highest bidder at auction... well what else are they supposed to do? If you can sell the car for more than they can, then why don't you try? I've worked with my customers to help them sell the car privately instead of bringing it to auction.

But alas, there are people that just believe "since I don't have the car anymore, I shouldn't have to pay for."

Does that same mentality work in a restaurant? The menu lists $25 for a steak; and when you ordered that steak, you agreed to pay for it. So when you're done, you put the bill on your credit card (ie a lender paid for the steak you just ate). Can you call your credit card company and tell them the steak doesn't exist anymore, so you shouldn't have to pay for it?

I agree with the idea that bankruptcy should not be a convenience. I have hired a bk attorney because of the situation that my family is in, but that is due to the economy. In the last eight months, I have been either laid off or been working reduced hours. I do not feel that I am shirking my responsibilites. I called my creditors and tried to work with them when things started going bad. None of them wanted to work with me. I called the company that financed my Scion, and first they offered my a deferred payment, which probably would have helped at the time to get to the first of the year. Then they said they would not defer the payment. I did everything that I could to make the payments, but I just could not make it happen. Finally could not do it anymore, so I called them and told them that I wanted to surrender the car. All of a sudden, they had a deal to lower my payments by over $100 a month, but I had to make $1400 in back payments first. Couldn't be done. If they had offered me the deal when I first told them about the updoming problems, I might still have the car today, and they would still be receiving payments. I did everything that I could do to try to work with them, but it ended up not being possible. I do not blame them, but I have a $12000 deficiency balance now, and there is just no way that I can do it.

To sum it up, for us bankruptcy was a last resort option. We did not just get up one day and say that we are not going to pay any more bills, and get a lawyer. I am still hoping that something will work out that we do not have to file, but with over 12% unemployment here, it is not loking good.

There is a missing bit of info here! What is the year of the vehicle? What is it worth? How much would it cost to fix it? How many estimates have you gotten? Debtcruncher is correct! It is not the fault of the lender! You still have that obligation! Without the above info you can't get a definitive answer! I had an old Chrysler 5th Ave and the tranny went! One place said $1200 and another said $400. After I got it fixed the rear end went! Same thing! One place said $800 another said $300. My Toyota Camry was running hot and losing water! Tires Plus said I needed a new radiator for $500.
Rising Sun Auto replaced my water pump for $250. If I had gone with Tires Plus I would have spent $500 and still have the same problem! The standard answer would have been "since we fixed it the increased pressure caused that old water pump to blow!" Get another opinion! This has happened to me at least a dozen times in my life!

I am the one that wrote above about filing bankruptcy if the loan company would happen to sue me. Please dont knock my mentality! You have no idea what all we have gone through. Our financial situation is a lot different now than when we bought the car. We are a victim of the economy and bad luck all rolled into one. I do not want to file bankruptcy. That is the last thing I want to do. I am just saying that if we get sued that is what we will have to do.

southern,

I am in a very similar situation. Could you please tell me who you are financing your car with?
I am unemployed and have been asking my financing bank to lower my monthly payments. I am VERY close to being repo'd.
Please let me know which co. offered to lower your monthly payments by $100.
-Thank You

The finance company is World Omni. They are the company that financed the car at the Toyota dealership. They did not offer to lower the payment until I was over three months past due. I think that they were making a last ditch effort to save the loan when I told them that I could not get caught up, and I wanted to return the car to them. It was not refinancing, but changing the term on the original loan. In the end, it would have cost more, but if I had the money, I would have tried to make the back payments and keep the car.

Thank you very much for replying.

Unfortunately, my loan is with Wachovia. I'm about 40 days past due. I'm on unemployment. (it was a Toyota dealership)
When I asked for them to lower the original monthly payment, they said they couldnt because I am on unemployment.
I would love for them to lower the monthly payment, but i'm afriad they will just take it before they offer to do that.
If it is reposessed, I will have to declare BK.

I only owe $1734.00 on my volkswagen. My car has been giving me problems since about 6 months after i purchased it in 2006. The original purchase price was $9995.00 and after all the extra fees and uneccessary charges were applied.... i ended up paying $14000.00 plus my down payment on the car. This was the 1st vehicle i puchased w/o paying for it cash. I am very pissed b/c i have not driven my car in almost 2 years and i was trying to pay the car note as scheduled but now i am behind 2 payments. If i were to pay those up to date i will be finished with the payments as of November 2009. I am soooooo disgusted with this situation and will never ever purchase a car w/o a warranty ever again! The warranty only lasted about 3 months but me not knowing any better i dug a deep deep hole for myself and now im stuck in it! does anyone have any suggestions, O and the problem I am having with my vehicle, thousands of others are having the same problem.

I am have the same situation as the last post by anonymous. 9k for a used car now I owe 2k again (6months later) to get it into running condition..thats just the engine..still needs other stuff as well.. just BS..called the lemon law lawyers and the state and they said if I signed off on the car I accepted as is. ><

Probably they are correct. If they don't offer a service warranty then they likely did sell it "As Is". Used cars are usually "caveat emptor" - let the buyer beware.

A lot of it is sheer luck, too. I have had some *great* used cars.