UPDATE: Please Read regarding automobile repo

[Hippoharbor]

Thank you for all of your advice. I am going to borrow money from my ex and pay the $14000 for the car, then I have to travel 650 miles to get the car and drive back. I will have to pay at least $1200 for body work and then pay to have car professionally detailed in hopes that I can sell this car and at least get half of my money back. Wish me luck. Some unmerry christmas this will be this year.




Hi, everyone. I need some rather urgent advice. As I had written last month, my brother died. My mom and I have been slowly recovering from this horrible loss, when we find out today that my SIL cannot afford to make payments on my brother's car any longer.

The problem is that my SIL's name was not on the loan. Just my brother's...and my mom's. She had to cosign a couple of years ago for him to get the new car loan. The car is only 3 years old (on a 5 or 6 year loan) and is in horrible condition (large dent on side, bubble gum/food/etc smeared into upholstery).

My mom said that she was going to call the loan company tomorrow and to tell them to repo the car, knowing this will ruin her credit for 10 years. Unfortunately, she can't afford the car payment nor the full-coverage auto insurance that would be required.

My mom thinks that once they repo the car that she has no financial obligations. My SIL, however, thinks the company will try to sell the car at auction and whatever they get will be applied towards the money owed, but whatever the remainder is, they will still try to collect from my mom.

I thought about trying to get my mom to trade my brother's car and her car (8 year old Saturn with 230,000 miles) in towards a new car in hopes that she could at least get trade-in amount for what is owed on his car, ~$14,000. I know, though, that neither of the cars would be near that value.

What to do? Have any of you known anyone else in the situation? I just feel so awful for my mom, having lost her second of her three kids and now facing financial ruins (literally supports herself paycheck-to-paycheck.

Any advice appreciated.

Thanks
Michelle

[schums]

First, (((HUGS))). This is the last thing your family needs right now. I have no BTDT experience with auto repo, but here's what I'd do. I'd have your mom call the loan company tomorrow and explain the situation. This won't be the first time they've dealt with something like this. There may be options you're not aware of. Second, sit down with SIL and Mom and see it they can work out a payment system for the short term. Can each pay 1/2 per month? If your mom can't swing this, can SIL come up with 2/3? Third, I'd get the car detailed inside and out. Auto detailers can get out an amazing amount of crud from the car, and it's usually not too expensive (at least here). Ask around for referrals. Finally, try to sell it on your own. Every time I've ever sold a car, I've gotten more $$$ for it when I've sold it then when I've traded it in.

GL, and I'm very sorry for your loss.

Sarah
Mom to Alex (3/2002) and Catherine (8/2003)

[egfmba]

FWIW, I've heard this scenario on Dave Ramsey's radio talk show. He says that if they repo the car, they'll sell it and whatever they don't get for it, they'll come after your mom for that amount. So, if the loan is for $1000 (example only) and they can only sell it for $500, they'll come after your mom for the rest.

According to Dave Ramsey, your mom would be better off selling the car herself for as much as she can get for it and then paying the rest off as well and as quickly as she can. That's the only way for her to get out from under the loan she co-signed.

If it were me in your situation, I'd ask your SIL to pitch in whatever she can to cover the shortfall, especially since she was the one who used the car (along w/ your brother, of course). Your mom didn't get the benefit of the loan or car, but she'll pay the price. This isn't a great situation for anyone, but I hope your SIL is at least fair about this.

Good luck with the situation, and I'll pray for your family tonight.

eva

[cleo27]

Have your mom call the loan company to see if there is life insurance on the loan. When I worked as a loan officer, we offered life and disability insurance on loans - if the insurance was purchased, the loan would be paid in full in the event of the death of the insured.

Also, she would not be able to sell the car herself, unless she had the full amount to payoff the loan - you cannot transfer the title without the lender releasing their lien.

I'm so sorry she is in this situation.

[Fairy]

DO NOT HAVE THEM REPO THE CAR. NO NO NO NO NO NO NO. Yes, I'm SHOUTING. Wanna make sure you HEAR ME. Do not DO NOT have them Repo the car. Worst possible thing. Ruining credit at your mom's age is a disaster that will never be recovered from. Will have ramifications that transcend what she's imagining. Help her with the payments. Take out a loan on the load. Consolidate loans. Do what PPs have said and call the loan company. They will work with you cuz they want their $$. They don't want to repo the care, they dont' wanna auction it, they want the owner to pay for it.

I don't care waht condition the care is in, you're in better shape being car poor and selling it even for a loss than the loss that your mom is gonna feel if she lets them repo the car. Oy vey, please heed this advice.

Please.

[DrSally]

I'm so sorry. I have no BTDT experience, but If it were me, I'd do what pp suggested and call the loan company, explain the situation and see what they suggest. They may be able to work with your mom on reducing the amount of the payments. I agree too, that you can get more $$ from selling a car yourself than trade in. I would clean it up, see how much you can sell it for and have your mom and SIL work out paying the rest, maybe the bank will help with really low payments for the rest. If your mom's credit gets damaged and they come after her for the $, that would be a major stress and she may end up having to pay more in the long run if you KWIM

[dcmom2b3]

Please, please, please heed this advice. With a repo, your mom would be liable for any deficiency betw the outstanding note and the auction price, AND a whole slew of costs associated with selling the car. Things like fees to auction companies. Storage of the car (at an exorbitant daily rate) between the time the car is repo'd and the time its sold. $75-100 a day does add up. Once you enter repo world, you encounter a whole community of businesses who do nothing but rack up these fees for their own gain.

[tarabenet]

And don't forget that the loan company *will* be coming back to your mom for the rest of the money. Why would they bother to try to get a good price for the car? They are planning on getting their money one way or the other. It is what they do. They aren't in that biz to be nice or to try to make the world a better place, after all.