Here are some of the pros and cons of turning in your car prior to repossession:
Pros:
- Avoids the damage to your credit that comes with repossession
- Gives you time to find a more affordable car
- May allow you to negotiate a settlement with the lender
- May be able to get a tax deduction for the donation
Cons:
- You will lose the car and any money you have already put into it
- You may still be responsible for the outstanding loan balance
- May have difficulty getting another car in the future
If you are considering turning in your car, it is important to weigh the pros and cons carefully and make the best decision for your individual situation. You should also consult with a financial advisor or bankruptcy attorney to get professional advice on the best course of action.
If you have decided to turn in your car prior to repossession, here are the steps you should follow:
1. Contact the lender.
Call your lender and explain that you are struggling to make your payments and are considering turning in the car. Ask about their requirements and procedures for voluntary repossession.
2. Prepare the car.
Clean and wash your car thoroughly. Remove any personal belongings that you do not want to leave with the car.
3. Gather the necessary paperwork.
This includes the title to the car, the registration, and any other documents related to the loan.
4. Meet with the lender.
Take the car to the lender's designated location and meet with a representative to sign the necessary paperwork.
5. Get a receipt.
Be sure to get a receipt from the lender showing that you have turned in the car.
After you have turned in the car, it is important to stay in touch with the lender. You may be able to work out a settlement for the outstanding loan balance, or you may be able to get a tax deduction for the donation.
