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? -- ChambersDear 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. This week•Used car buyers get less and pay more•Can I return my car without wrecking my credit?•Which county determines the sales tax on a car?•What if you just can't meet lease payments?If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter advertisementRelated Links:Auto loan rates: March 26, 2009Saving on insuranceWhere's my car bailout?Related Articles:Vehicle leases going upOld loan not added to newCan't sell leased car
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.
If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter