Auto repo advice - The Bills.com Blog

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Auto repo advice

Question: our 2005 Kia van broke down, we are under warranty but somehow they are able not to honor it. It is in Dallas, TX (we were on vacation when this happened) what happens if we leave it there and it goes back? We have no other choice at this point. We can not afford to pay 4000.00 to be fixed and I am tired ofdealing w/Kia.

Answer: If you leave your vehicle in Dallas and the creditor ends up repossessing it, the creditor will likely sell the car at auction. Once the vehicle is sold, you will probably be responsible for the current amount owed on your loan, less the money received at auction. This remaining debt is called a ?deficiency balance.? Given the fact that the vehicle is relatively new, meaning you probably still owe a fair amount of the original loan, you could end up owing a large deficiency balance, possibly as much as $10,000 or more. Once the creditor has sold the vehicle and determined the deficiency balance, it can begin collection efforts on the account like any other unsecured debt (since you would no longer have the car, the debt would be considered unsecured). You would likely receive calls from collection agencies attempting to collect on the account. In a worst case scenario,

the creditor could sue you to obtain a judgment against you, which could result in bank levies,, a lien on your property, and/or wage garnishment depending on the laws in your state. Some states restrict a creditor?s ability to collect on deficiency balances, so I encourage you to consult with an attorney licensed to practice law in your area to discuss the implications of vehicle repossession under your state law before you decide how to proceed.

Generally speaking, allowing a vehicle to be repossessed is bad idea. You will probably be stuck with a deficiency balance which is a lot more than $4,000, what the repairs will cost, if you allow the vehicle to be repossessed, plus you will lose the use of the car. In almost all cases, I discourage consumers from allowing their vehicles to be repossessed, as a repossession frequently causes a consumer?s financial difficulties to worsen rather than improve.

I recommend that you try to borrow the money your bank, credit union, or friends and family, to pay for the necessary repairs. Once you have repaired the vehicle and brought it home, you should consult with an attorney to find out if you have any cause of action against Kia for violation of the warranty terms. In addition, since you say you are ?sick of dealing with Kia,? you may want to consider refinancing your auto loan with a different lender. To read more about auto refinance loans, I encourage you to visit the Bills.com website at http://www.bills.com/refinance-car-loan-articlebills/.

I wish you the best of luck in resolving your dispute with your auto finance company, and hope that the information I have provided helps you Find. Learn. Save.

Best,
Bill
www.bills.com

Also, make sure to get a free financial health check-up with Bills IQ!

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Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!

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