Giving back car will damage your credit
Wednesday, April 23rd, 2008Dear Terry,
We owe $17,379.40 on our auto loan. We have already purchased a smaller vehicle that gets better gas mileage and has a slightly lower monthly payment. You said to give back the original car to the dealer or the finance company only as a last resort. Help.
— Gregory Merkel
Dear Gregory,
If you simply turn the old vehicle back to the finance company without paying off the balance, it will damage your credit score the same as a repossession. Try selling the old vehicle. Since I assume you owe more than it’s worth, try to find the cash to cover the shortfall. (more…)