Can I Return My Car to the Dealership?
Have you ever been excited to buy a brand new car only to find out that the added taxes, insurance and other fees bumped you well over the “sticker price”? This leads to car owners getting behind on their auto payments and wondering what they can do to get out of the situation.
Here are the exact steps you can take.
1. Come to Grips With the Numbers
Some experts say that your auto expense, which includes your car payment, maintenance, and insurance, should not be more than 15-20% of your take-home pay. If your outgoing expenses total more than that, your best bet is to confront the situation head-on and evaluate the solutions.Take a look at your budget and see where you can cut back on other expenses like eating out, entertainment and frivolous spending.
2. Go Back to the Car Dealer
The first option is to head back to the dealer and see if you can trade in your current vehicle for a less expensive one. You can generally get a great deal on a nice used car that won’t have a huge price tag attached to it.Thankfully, some car brands and states have friendly return policies, but there’s a chance you’ll still lose out due to the value of a new car depreciating so quickly. You may not get the full amount of what you paid for the car, which means you’ll be responsible for paying off the remaining loan balance yourself.
3. Sell the Vehicle Privately
Another smart option is to sell the car privately to a colleague or friend, so you can get more money to pay off the large car loan. Most of the time you get a higher price for the vehicle by selling it directly to an individual, than you would if you sold it back to the dealership.If you still have a remaining balance on the car loan after selling it privately, you could consider taking out a personal loan from a local bank or credit union. This isn’t the best scenario but it’s a smart solution considering the circumstances.
4. Find Someone to Take Over the Payments
Lastly, put out the word that you’re looking for someone to take over the car payments. Do an online search for anyone looking to relieve you of the auto loan balance. Then advertise on sites like Craigslist or eBay Motors to find potential buyers.This method could save you a lot of hassle of dealing with creditors and the original lender, while allowing you to get rid of the budget-busting car payments. All you have to do is both agree to refinance the auto loan into the name of the new buyer, and you’re all set.
5. Do a Voluntary Repossession
If you’ve exhausted the above options, there’s one last-ditch thing you can do; a voluntary repossession.A voluntary repossession is where you voluntarily surrender your vehicle (or other property) that’s connected to a loan, in to the lender where you financed the purchase. This generally occurs when you have fallen behind so far in payments that it’s the only option available. This will keep you from having to face creditors and other legal action in the future.
To voluntarily surrender your vehicle to the original lender, you first have to contact the creditor to explain your decision. Let them know you can no longer make payments and wish to surrender the vehicle. Once you’ve let the creditor know about the situation, they will verify the location where you can drop off the car, as well as the details for processing the repossession.
Don’t be surprised, however, if they try to talk you out of doing a voluntary repossession, since they want to continue making money off your loan. Many times they will offer ideas on how you can afford the car, as well as strategies to make the payments on time.
2 Responses to “Can I Return My Car to the Dealership?”
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Thanks for the post Carrie.
How does #3 work? In other words, since the bank still has the title, how do you sign the car sale over to the buyer? How does the buyer apply for a title in their name? Do they just need some sort of sale slip proving change of ownership?
So then with the car being sold, but still owing the original auto finance bank, you would then pay that bank the new buyer’s purchase price, then continue to make payments on the outstanding balance?
Thanks.
Also as a side note there are a couple of typos in the article you may wish to edit:
1) “Do an online search for anyone looking to take relieve you of the auto loan balance.”
2) There’s a rogue quote character in the first paragraph of #3.
Cheers.
Hi there, yes, with #3 you would have to get the funds from the private sale of the car and then combine that with money from another source (a smaller loan from a credit union for example) in order to pay off your car loan so the new owner can take the title. Then you might still have a new loan but the balance would be much smaller. Hope that helps! Also, thanks for catching those typos!