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So…in 2006 I financed a brand new Ford explorer. Currently it has a 0% APR and I’m 35 months into a 60 month contract. I owe ,611 and have 25 months left. Payments are 4.46 per month.

The problem is that it has 66,000 miles and the cylinder heads are bad. It’s going to cost me 00 to replace the cylinder heads which include 12,000 mile or 12 month warranty. OR I can buy a new engine for 00 which includes a 36,000 mile or 36 month warranty.

Would trading this in and buying another car be a good option? Would walking away from the vehicle and voluntarily having it repossessed be a good option?

What would be my best option if I have a credit score of 640 and income of 86K/yr?

Ideas? Suggestions?
Sigh… It figures that the voices of reason are available…lol

3 Comments »

1. 

   It is never a good idea to let a vehicle get repossessed, a repossession voluntarily or not is a huge negative hit to your credit and will be reported to the credit bureaus for 7 1/2 years from date of first delinquency.

   Your lender will sell the car at auction for whatever they can get out of it, and they will still come after you for the deficiency balance of the loan. They can take you to court and sue you and if judgment is won and your state laws allow, they can garnish your wages up to 25%, lien personal property or attach and levy your bank accounts.

   If you are not upside down on the loan why not replace the motor, get the better warranty and drive it until the wheels fall off:~)

   Comment by Dixie Darlin' — August 19, 2009 @ 1:55 pm

2. 

   First I would look up the Kelly blue book value of your car. This will give you the actually value your car is worth according to the year, condition the the car is in, and the actually amount of miles on it. I would weigh out the option’s from their. As far as your credit score only being a 640 and you have a 0% apr I would say you got a pretty good deal. As far as having it repo this is one of the worst things you can do, it will go against you for the next 7-10year’s and will lower your credit score even more. If you come to the conclusion the car is going to cost you more to keep then it’s worth, after you find out the actual value on the car, I would check around with your local car dealers about a possbile trade in (being the economy is in such a bad state, they have some pretty good deals going on right now).

   Comment by Lou — August 19, 2009 @ 1:55 pm

3. 

   You stand to lose a lot of money and credit if you walk away. You will also lose a lot of money if you trade it in, especially in this condition. What you do is pay for the repair ( the 5600 sounds like the better deal) and then you either a) sell it to a private party or b) keep driving it.

   Comment by Me — August 19, 2009 @ 1:55 pm

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