How bad credit hit is a repo?
I already know it’s bad. What I need is info on how many credit score points it takes off. Also, if you buy a second car before the repo and pay it on time, will that help offset the repo? A buddy is in a really bad car loan with an aging car and walking away from the loan is probably his only shot at getting out from under it anytime soon. People have told him to walk away from the bad loan and start fresh and keep the rest of his credit squeaky clean and he’ll be okay.
Auto finance is what I do for a living. So let’s take this one question at a time.
First your friend can expect to take approx. 100-point hit if he lets his vehicle go back..
If he buys a second vehicle before he lets the first one go back, yes it will off set the repo somewhat since it will show a good pay history after the repo.
Now, what he needs to consider is that the lender on the first vehicle will sell the vehicle at auction for less than it’s worth and he will be stuck with the balance owed plus all of the repo fees, auction fees, towing fees and lawyer fees. This will most likely add up to thousands of dollars and the lender will come after him is court and get a judgment. At that point they can attach bank accounts, garnish wages (if your State allows it) and file liens on any other property that he may own like vehicles, boats, land and homes. The end result is that he is going to end up paying for the vehicle one way or another and not have the use of it.
Add this to the repo and the collection activity and the judgment that will all show on his credit for 7-years and he is going to be screwed, blued and tattooed.
Did I mention also how hard it’s going to be for him to get approved for anything involving credit for several years if he doe’s this?
February 7th, 2010 at 7:45 pm
Ya this is too bad
References :
http://www.freewebs.com/credit-scores/
February 7th, 2010 at 8:17 pm
If he’s in a really bad car loan, his credit is probably already shot. People don’t get really bad car loans unless they can’t get good ones.
Why does he think he can get a good car loan now? If he really can get a good car loan now, he would be better off to refinance his current car than to walk away from his current loan.
As far as how many points it will drop his score – it depends on a lot of factors, but it will be a significant hit – nearly as bad as a foreclosure on a house, since people will generally quit paying everything else to save their house and their car.
References :
February 7th, 2010 at 8:46 pm
Auto finance is what I do for a living. So let’s take this one question at a time.
First your friend can expect to take approx. 100-point hit if he lets his vehicle go back..
If he buys a second vehicle before he lets the first one go back, yes it will off set the repo somewhat since it will show a good pay history after the repo.
Now, what he needs to consider is that the lender on the first vehicle will sell the vehicle at auction for less than it’s worth and he will be stuck with the balance owed plus all of the repo fees, auction fees, towing fees and lawyer fees. This will most likely add up to thousands of dollars and the lender will come after him is court and get a judgment. At that point they can attach bank accounts, garnish wages (if your State allows it) and file liens on any other property that he may own like vehicles, boats, land and homes. The end result is that he is going to end up paying for the vehicle one way or another and not have the use of it.
Add this to the repo and the collection activity and the judgment that will all show on his credit for 7-years and he is going to be screwed, blued and tattooed.
Did I mention also how hard it’s going to be for him to get approved for anything involving credit for several years if he doe’s this?
References :
Finance Manager for a car dealer for over 7-years / 2007 edition Consumer Action Handbook free at http://www.ConsumerAction.gov
February 7th, 2010 at 8:51 pm
Going through the same thing right now. Son has serious health problems, work is slow so we tried to negotiate something with the creditor. In the end we gave it up.TJ, Ithink U know all this about me anyways. So, when you find out what your friend can do to save his hide, let me know.
References :