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Posted in Auto Loans
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cindee1115

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If you voluntarily give a car back to the bank, how much of a hit will your credit score get?
I have a friend who recently found out that she'd been bamboozled! She was so happy she could purchase a car last year that she didn't realize the dealership pulled the wool over her eyes. She has an $18,000+ loan when the car is barely worth $7,000. She was going to trade it in and get a new car. She was so surprised to find out she'd been hoodwinked when she tried to trade it. So, she and I were talking and she told me someone suggested that she purchase/lease a brand new car, then give the old car back to the bank/dealer -- her credit score will take a hit, but will rebound in a year or 2. Here was my question. How much of a hit will her score take and what happens if she don't pay the difference of what's left over once the bank/dealer resell/auction the car?

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It's called a "volunteer repossession" and it is almost as bad a repo..... Don't know how many points your credit will dive.... You could probably as the guys a myfico for more accurate info concerning your score. As for the car; I'd keep it, bite the bullet and pay extra money towards the loan until I pay it off. Seems to me that your friend is just itching for a new car?  This could reflect in a negative way with lenders.......... Also a lease purchase is just that; you lease a vehicle for x amount of months typically 36 month with the idea that towards the end of the lease you will find someone who is willing to finance the car for you... it still will depreciate in value and you must persuade the lender why they should finance your friend.... Focus on not being an emotional spender.......

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