How to Avoid Repossession: Managing High Car Loan Payments
Download MP3- Overview of Car Payment Issues:
- Rising car payments, averaging around $11,000 for a typical car with loan terms of 6-7 years.
- More people are struggling to afford car payments, leading to repossessions or the option of a short sale.
- What Is a Short Sale?
- A short sale is when car owners negotiate with their lender to take back the car, avoiding negative equity.
- Negative equity occurs when you owe more on the car than it's worth, making it difficult to sell or trade the car.
- Car Short Sale Process:
- To initiate a short sale, you need to contact your lender and provide documentation such as:
- The car’s value
- Your income
- By providing the right paperwork and approach, lenders may agree to a short sale instead of repossession.
- To initiate a short sale, you need to contact your lender and provide documentation such as:
- Why Lenders Prefer Short Sales Over Repossession:
- Repossession is costly for lenders and reflects poorly on their books.
- A voluntary short sale can be a better option, avoiding additional fees and potential negative impacts on your credit.
- Benefits of a Short Sale:
- Can eliminate liability after the car is taken back.
- Often, it doesn’t impact your credit as severely, as there’s no deficiency judgment.
- Final Tips:
- If you're facing financial challenges with your car, don’t let it go into repossession.
- Explore the option of a short sale to protect your financial future.
For more details, check the link below to learn more about the car short sale process and how you can approach your lender.
