If you owe 20000 on an SUV worth only 15000 at 16 persent interest and your credit score is 5.5 and you're 62 would the smartest thing for you to do financially be to just voluntarily return the car?

Answer 1

Try to refinance at a lower rate if you can afford payments. With your credit score, you should be able to get something under 8%. If you can no longer afford payments, there are a couple of roads you can take: 1) Sell the car person-to-person for what you owe on it. Once you pay it off with the buyer's money, you will get the title and can sign it over to the buyer. You have a fresh start this way and can shop cheaper and smarter. If you turn in the car (I think it is the same as voluntary repossession), then your credit will be hurt badly. The dealership won't take it back either. 2) Go shopping for a car that is very cheap and use the SUV as a trade in (not recommended because they won't give you nearly as much as it is worth). You should get a car and cash from the dealership. You would pay down the loan with the extra cash and it should be more manageable - you may have to get a new loan so the SUV title can go to the dealership. At least the loan will be much less (hopefully). 3) Repossession (volunary or involuntary). The bank will sell the SUV at auction and you will have to pay the difference on the loan of what they couldn't get for it.