Looking to get any advice or help from you guys. My GF just got her car repossessed, she had to change jobs and fell behind on her car payments. Every month became a little harder to stay afloat but she did the best she could until recently. Her car is due back in March 2024 which is several months from now. In order for her to get her car back from repossession she will have to pay $3,082 which is reinstatement, collection fees from bank and repossession.
Her monthly payments are 494.00
Letting it take a hit on credit if she doesn’t pay to get the car back will negatively impact her credit.
She also needs a car to go back and forth to work
Are there any suggestions as to how she should go about this?
Or what options would be the best for her to go with if any?
If the 3082 is paid, is it not reported as a repossession? Does this bring everything current?Or is the damage already done?
If the $3082 is paid, any idea what the car is worth vs what the payoff/buyout is? If you pay the 3082 and you have say $3000 in equity, it softens the blow.
The damage is probably already done to her credit. Late payments, missed payments, and the repossession are going to stick around for the next seven years.
You would need to verify with lender if the $3xxx is paid does that prevent the repo from showing up on her credit? Seems like the late pays would still be on her credit even if she can make the account current. If she at least can’t keep the repo from being on her credit, then what’s the point in paying the $3xxx?
It’s BMW
Guessing the bank is BMW financial services
think the late payments will still be on her credit
They did mention notifying the credit report that she paid to remove the repossession off her credit
Quick math looks like in the ballpark of $6500 between now and disposition, for the reinstatement and remaining payments. In her new job, is that something she can reasonably afford, or will it be a struggle? Said another way: if the reinstatement fee magically went away, can she afford the $494/mo between now and March, or will that be a stretch? In her shoes, that would help me decide whether I want to try and resuscitate the BMW or not.
Sounds like there is no way of avoiding it landing on her credit report, which is what I would expect – she might be able to negotiate that by one-paying the past-due balance and remaining payments, but coming up with $6500 doesn’t sound realistic in her current situation.
Understanding the short-term problem, for myself I’d want to understand the longer-term plan first: what happens in March? Was the plan to buy this BMW out, or purchase something else? Short-term fixes will likely be more expensive that a long-term solution.
As that BMW ages, it will likely be more expensive to own/maintain than some alternatives, but ejecting from a repossessed BMW and buying something used with a Tier 3 credit score is going to be the last car shopping she needs to worry about for a long time…
If she is a member of a credit union, or has a good relationship with her bank, I’d consider having a conversation with a loan officer there and even letting them run credit to understand (1) how much money might they loan her on a purchase (2) at what interest rate – before even going down the cosigner route.
How serious is the relationship? Could you pay everything off for her and have her repay you if it means that her credit will only take a ding for the late payments and not the repo? I’d consider this if it’s serious as her credit will impact your ability to purchase a home later, together.
If she had a clean late from here to March she could afford to pay the 494.00 but because she has to come up with 3,084 she’ll be basically living check to check which comes every two weeks so it will be very hard.
Her plan in March was to get into another lease but not a bmw because she will want to have lower payments.
But now her credit has taken a hit she might have issues getting approved by herself w out a co signer
side note, wouldn’t it be difficult for her to possibly get into another lease w out having to put a down payment on a new lease and be under $500 a month?
One thing to keep in mind is that leases have become a decent bit more expensive since your gf leased this vehicle. MF’s have increased, historically high RV’s have been reduced, less incentives / rebates and dealers are discounting less than they previously were. All of which has caused leases across the board to increase from two years ago.
Would your gf be open to a used Toyota / Honda for a year or two?
It’s very unlikely she is leasing another car in the near future with a repo on her credit, so she should start thinking about a Plan-B. Good she’s thinking about her budget, but very few vehicles are leasing well these days.
I see you tagged NY and ME, which state is she actually living in? Trying to get a sense of both the sales tax and any trade-in credit for sales tax (in her situation, e.g. if I lived in a state that taxed the whole lease but also offered a trade-in credit on the sales tax, I would definitely do the math on spending $3k to resuscitate this, only to trade it in on a purchase).
One other thing she should check: current payoff and what a third party would buy it for.
We haven’t mentioned what kind of BMW it is, I suspect it doesn’t have any equity, but if it does that’s worth considering.
I’m treating this more like “a friend…” post, so I’ll gently suggest that she register here on LH and engage herself. These sorts of things happen, everyone here is rooting for a positive outcome, but in our experience talking through a third party is always less engaging/impactful than if the actual person having the issue is involved in the conversation. She is cordially invited to jump in here so we can help her find a solution, and it’s not all on you.
Hello I’m his GF thank you everyone for all the advice given to us. BMW is 2021 white x228i. I don’t have much knowledge on what to do with this situation. I’m stressed because my lease was up in March and don’t want my credit being messed up. So not sure if I pay 3,082 which is mostly fees they’re charging me for being 60 days late or mess my credit up and leave the involuntary repossession.
Again thank you for all the help it’s much appreciated
If this has been reported to credit agencies, it’s probably too far gone. Unless you can get in writing and confirmed again in writing by someone else that paying the fee it won’t go on your record, it’s probably a lost cause. Sorry to hear about your situation.
Welcome! Take some time to read through what was shared here, and feel free to ask any questions.
Now that we know what the car is, I’d suggest:
You can plug-in the VIN, mileage, and condition. With less than an hour of effort, you should be able to get a half-dozen actual estimates to see what this car is worth.
There already is (and will be) a ding a your credit report, but you’re asking the right question: do I spend the money to recover this, or eject and deal with the replacement 6 months early. To my point above, having an idea what the replacement would be (consider buying, not leasing, something Asian with a warranty until the loan is paid-off), and what the impact will be.
On the impact, this is a very useful thread:
You will want to spend some time reading through, but while you are doing there you should pull your 3 credit bureaus to see what is actually on which, and get your current FICO scores. You are eligible for a free credit report every year, and often your Bank or Credit Card might give you your current FICO (not Credit Karma) score for free - 2 of my credit cards offer it right inside their app. If not, you can pay for a FICO subscription and get it - I’d recommend paying $30 for the Advanced and cancelling after 1 month:
Also check out the tips here:
Did BMW give you any kind of deadline by which to respond to them, before they close the repossession and send your car to auction? How long do you have to make a decision?
