Auto repo clarification

[wyett717]

What is the name of your state (only U.S. law)? CO

My sister-in-law lives in Colorado, and just had her car repossed. She claims that the lender told her if she voluntarily surrendered the car, the balance would be wiped out, and it would have no affect on her credit. I was under the impression her car would be auctioned, and she would owe the remaining balance on the car. I find it hard to believe that a reposession would be so harmless to her, am I wrong?

 

[dolebot]

What is the name of your state (only U.S. law)? CO

My sister-in-law lives in Colorado, and just had her car repossed. She claims that the lender told her if she voluntarily surrendered the car, the balance would be wiped out, and it would have no affect on her credit. I was under the impression her car would be auctioned, and she would owe the remaining balance on the car. I find it hard to believe that a reposession would be so harmless to her, am I wrong?

I tend to agree. Perhaps the lender was a buy-here pay-here? Where the dealer is also the bank? In that case since they don't report to the credit bureaus she's only out the car payments.

If it was a real dealership and finance company - she can expect a mark on her credit and a nice collection experience to boot. They are "VERY" good about that. A repo is about the worst thing you can have. Affects getting jobs, you can't rent an apartment, can't get credit anywhere....

 

[ecmst12]

There is already a mark on her credit from the late/missed payments leading up to the repo. Perhaps she doesn't have much left on the loan and so there won't be much left owing after the auction. More likely, the repo guy was just smooth talking her.

 

[wyett717]

Thanks for the info. The lender is/was a credit union, so that's going to have more bearing than a dealer financed loan. The lender somehow tracked my husband and I down in search of SIL; that's the reason for my curiosity about this. Plus, SIL has a lengthy history of blowing smoke up our butts, so I was assuming she was at it again (appears to be the case yet again).

Hard to tell exactly how much she owed on the car. It was a 2007 vehicle, so it could be a significant amount left to pay. Thanks again!!!