Returning car to lender a bad move

Dear Terry,
I have a car that I can no longer afford, but I am not behind in payments. I have contacted the lender and informed them I would like to return the car for financial reasons. Their advice is they will sell the car at an auction and I will have to pay the difference. I don't know if can even afford to do that. What is your recommendation? And how badly will this affect my credit?
-- Chambers

Dear Chambers,
This is not a good deal for you. The auction price will be at a wholesale price, which will likely be hundreds -- if not thousands -- of dollars less than you owe. Then the lender will come after you for the difference, which will severely impact your credit. You should explore other options, including selling the car yourself, assuming it's worth more than what you owe, or trying to refinance it to lower your payments.

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