How to Keep the Repo Man From Repossessing Your Car.

I have a family member willing to just have the repro man come pick up their car. I have tried to dissuade them from doing this to no avail. So here's the questions I received regarding giving your vehicle back to the bank and what I think you should do to see if you can have this embarrassing event from taking place.

I owe more than my car is worth why should I keep it?

First of all you are sounding like the people who are just having their homes foreclosed on. Homes normally increase in value, but cars can lose as much as 20% of their value the minute they drive off the lot. Bottom line though is you signed the contract. Do what you can to abide by the contract.

First try calling your lender and see if you can have the loan terms modified. Try not to have the length of the loan extended. Instead push to have the interest rate reduced. Or the lender may even agree to have a period of reduced payments.

When economic times are not so good your lender may be willing to play a round of "Let's Make a Deal." The economic crisis has been devastating for everyone including car lenders. Car lots have been overflowing with repossessed cars. The credit crisis has made it much harder for potential car buyers to get loans to buy cars. It has caused a huge decline in car sales and a huge surplus in cars with so many repos and unsold new cars. The current "Cash for Clunkers" program has helped change this a bit, but with the program now over things can revert right back to where they were. This may keep the lender from wanting to take your car and work out a deal. Anything from keeping another repo off the lot. The bank only recoups their money from selling the car. More cars means less money back in their pockets. Getting a partial payment is better than no payment.

I just want them to repossess the car. Can't they just take it?

If you don't want to try and work with the lender at least offer to give the car back rather than have it repossessed. By proactively giving the car back you will at least avoid paying the repossession fees. You will also avoid having the embarrassing scene of having your towed at work or at home. By voluntarily turning your car you turn a negative situation into a more responsible one.

Will I still owe money if I turn the car in?

Yes, you will. As I explained before the bank only gets paid when the car is re-sold. So you will responsible for what you owed when you turned the car in and what the lender can recoup when it sells the car. If you don't cover the payment you didn't live up to your contractual obligation. Whether you turn in your car or it is repossessed, not paying the balance will stay on your credit report for seven years.