No. I don’t believe so.
But let’s see if we can’t come up with something a bit more creative.
OP - do you own your home and does it have any equity in it, if so?
The “creative” folks are probably asleep already in the east coast … you may get some more response tomorrow morning.
… once this crisis is over, you will have to tell us how you got into a Q40 lease for $698/mo (for 39 months) 
… or what other assets do you have?
-
Like a 401k** or retirement account** (that may allow you to borrow against). ** The interest you pay on these kind of go back to yourself
-
How about your employer (if you work for somebody)?
We are just laying out the options here …
OP is limited from posting more until tomorrow anyway as a new user. I was thinking the same thing re: more creative solutions…
Yeah, the first thing is to find a way to stop the bleeding ($698/mo) so OP is about $9k short. Bleeding not just in dollars (going more into a hole) but the late payments will be damaging his credit which is a double whammy.
Couple of late payments will hurt his credit score. A 60 days late is even worse. If he can’t find a lease swap and the OP offers his last $3k, pick the worst option and voluntary repo is a quick out rather than to fight it. Unless he can score another job for the next 17 months to cover it.
There really is no substitute for riding this out. The negative equity will follow you into the next deal etc. Good luck and keep the faith.
OK, firstly a voluntary repossession isn’t some life saving move here.
If OP turns the vehicle in, they will write the negative against him and hold him accountable.
He signed the contract - he owes the money.
Here’s the process…
1). Car is surrendered
2). Financial company sends OP bill for 12k+ repo + whatever else they find to be wrong with the car
3). Financial company asks OP for the money (99% of the time.)
4). OP might come to a payment arrangement with them - they might waive some since he’s in a hardship situation (unlikely)
5). They will sue you for the amount owed if you cannot pay them. They will file @ your local district court and have you served.
6). You can challenge it or whatever you choose to do but they will eventually get a judgement
7). They will squeeze him for the money. Depending on your state, and it’s judgement rules you can lose a lot or a little.
Things like
- Unsecured cars (no loan)
- Bank account
- Personal assets
- Financial holds
- Wage Garnishment
This isn’t to scare OP - but it’s likely to happen. I have seen it happen many times and it’s near routine for companies in the auto world.
The good news is OP has 6+ months until this could happen. He can probably stretch this another 6 months through the court system too. It takes time for a large company to hire a law firm and have it all processed. They will forget some paperwork or something will be misfiled and he can snipe the mistakes to buy himself time. He can probably setup a payment arrangement with them as they likely don’t want to fork out the money for any of this. However - they will come get the money if he doesn’t get proactive.
Source: Sold in the absolute Ghetto. Watched it happen time and time again.
2 Likes
Yes you will be on the hook.
There is a substantial balance due that you’re unlikely to pay.
OP and I mean this sincerely - find a way to pay this for the next 17 months.
If you have to downsize your living do it. If you need to ask family for money, do it. If you need to work two jobs, do it.
Do not ruin your credit over a lease… you will face many challenges for the next 7 year at a minimum if you let this go bad.
Correct me where I am wrong from your situation analysis, I maybe assuming some items here.
- Your credit score is high 500s-mid 600s
- Utilization over 50%
- Car credit history is showing late payments.
- Upside down $14k on car with $700 pmts.
If your whole credit picture is not salvageable speak to a bankruptcy attorney. If you can pay your credit cards you may look into voluntary repo, and go ahead a get a cheap one time pay $1200 Chevy Cruze with a co-sign (which minimizes the risk for the Co-signed). Get the Cruze immediately before your credit tanks any more, save the $1800 the negotiate the negative equity on your voluntary repo. At this point you have a car, your credit will recover. And you won’t have any more car payments! Time to save money, and put that $700/mo to your credit cards and more. Your situation sucks but there is a light at the end of the tunnel.
It’s unlikely GMF would buy him @ A tier… he would have a much higher MF.
When purchasing the first person on the contract provides the structure (credit, income, place of residence). The second person is just additional income and while their credit is reviewed, it’s not a huge part of the structure. (This is why when parents buy their kids cars - they usually are the first name on the registration.)
Leasing is a different beast.
When leasing BOTH signers have to qualify for the lease. They both get taken into account because they’re essentially renting the vehicle to them. They expect to know where the asset is and who is using it at any time.
There is light at the end of the tunnel though, you are correct. This isn’t the end of the world OP - you just need a plan.
At Tier B it’s manageable, GMF is very lenient because the dealerships package deals in finance. (Put 4-5 good deals the financial buyer) I saw someone get a Tier A with a 650 score. Even at Tier B MF difference shouldn’t be too high, Tier C is when you pay through the nose.
At that point someone else can get the lease and OP can be the co-signer just to have his/her name on the insurance.
Unless this store has the portfolio from god - they will not buy a recently missed payment(s), most likely low income (or high DTI) @ B tier.
He’s at the bottom of the barrel for them.
1 Like
This is great information, @Benedetto - thank you for sharing (and more important, for correcting me).
Everyone here has done a far better job of articulating my concerns with rolling this into another lease - namely that I’m not even sure its possible.
So I think, given @Benedetto 's point about Voluntary Repo not discharging the debt, worst case scenario is in fact bankruptcy which will mean no credit for effectively 6-7 years.
So, my questions to the OP are:
(1) Do you own your own home? If so, do you have any equity? You could potentially use a HELOC to payoff your credit card debt and/or negative equity, with the understanding you’d be putting your house on the line if you can’t come up with a way to pay down both the principle and interest in a timely fashion.
(2) Do you have a 401(k) you can borrow against? Typically folks can borrow from their 401(k) as long as it is paid back within a certain period of time. I believe, 5 years, but I’m not a financial planner so someone would need to confirm that. Again, you need to be religious about repaying the account because if you do not, you’ll be hit with an early withdrawal penalty PLUS income tax on the withdrawal which will be a potentially very significant hit to you.
(3) As others said, family or others you can borrow from?
OP needs extra income (2nd job) and paring down expenses ( get rid of cable, find a roommate, less eating out etc etc). Repo is the last thing I would personally consider.
Once the budget is balanced and the payments become curent then OP should evaluate trying to transfer lease via lease-swap with a 3k incentive.
Sorry all haven’t been able to reply I reached my maximum Limit for a new user thank you all for the advice I’m seeing some viable options. Unfortunately I don’t own a home so I won’t be able to pull equity out of it. I’m think the repossession would be the last resort I’m thinking it won’t come to that.
have someone steal the car and thrash it total loss!
What a great idea. Why not just go steal a brand new Ferrari too? FREE CAR!!!
not trying to get in trouble and owe on my vehicle