How to Get Rid of a Car with a Loan
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How to Get Rid of a Car with a Loan – If you have a car loan and can’t afford the payments anymore, you may be wondering how to get rid of the car and get out from under the loan. Here are some options to consider.
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Introduction
If you’re stuck with a car loan you can’t afford, or if you’re simply ready to get rid of your car for a better one, there are some things you can do to get out of the loan without too much financial difficulty. It may take some time and effort, but it is possible to rid yourself of an unaffordable car loan.
Check if you can sell the car
The first step is to check and see if you can sell the car. If you have a loan on the car, you will need to pay off the loan before you can sell it. You can check the value of your car using Kelley Blue Book or NADAguides. These websites will give you an estimate of what your car is worth.
If you have equity in your car, meaning the value of your car is more than the amount you owe on the loan, then you can sell the car and use the proceeds to pay off the loan. If you do not have equity in your car, then you will need to find another way to pay off the loan.
Pay off the loan
The first thing you need to do is pay off the loan. To do this, you’ll need to contact your lender and let them know that you want to pay off the loan. They will then provide you with a payoff amount and a date by which you must pay the loan in full. Be sure to get this in writing!
Once you have the payoff information, you can start shopping around for a personal loan or another form of financing. You’ll want to get the best interest rate possible so that you can save money on the overall cost of paying off the car loan.
Once you have the new financing in place, simply make your final payment to the lender and obtain a release of lien from them. This will allow you to register the car in your name and obtain insurance without any issues.
Voluntarily surrender the car
If you can no longer afford your car payments and the lender will not work with you to modify the loan, your only other option is to surrender the vehicle. This means that you give the lender the title and keys and walk away from the vehicle. The lender will then sell the car at auction to try and recoup some of the money that you owe on the loan.
The upside to this option is that you will no longer have a car payment. The downside is that you will likely still owe money to the lender even after they sell the car. If this is the case, you will be responsible for paying off the remaining balance of the loan. You will also likely have a negative mark on your credit report for voluntarily surrendering the car.
Repossess the car
If your car is worth less than what you owe on it, you may be able to voluntarily turn the car over to the lender in what’s called a “voluntary repossession.” To do this, you would need to contact your lender and let them know that you are going to return the car and give them the keys. This may sound like a good option, but beware that turning the car over to the lender is just as damaging as a traditional repossession when it comes to your credit report.
