returned new car

[deaglen]

What is the name of your state?What is the name of your state? colorado

I purchased a car had it for 4 months, I lost my job and called the bank where i purchased my new car and asked them what i should do. They said I should return it since i can pay. So i did today I was served papers to be in court for the remaining of the loan. Is this right? Can they do this? I thought I was doing the right thing by returning the car. I guess the sold the car, I asked them for proof of what the sold it for? and they wont give me proof anything. Can they do this?

 

[justalayman]

Of course they can do this....don't know of it is the correct term but I have always heard this as a voluntary reposession. You can't expect them to take a loss because you lost your job so they are attemptimg to collect the difference between what you owed them and what they recieved in selling the car. As far as what they sold the car for...can't help you there but I'm sure somebody here will know.

 

[JETX]

I purchased a car had it for 4 months, I lost my job and called the bank where i purchased my new car and asked them what i should do. They said I should return it since i can pay. So i did

You did what is called a 'voluntary repossession'.

today I was served papers to be in court for the remaining of the loan. Is this right? Can they do this?

Yes, they can charge you for the deficiency in your loan.... but it should not be the full remaining loan balance as your post says. Here is the way this works:
1) You can't make payments so return the vehicle. You are charged the remaining amount due on your note.
2) The lender then charges you any repo fees (none in your case since you returned it), plus any vehicle 'make ready for auction' fees, plus any auction sales fees.
3) The lender then sells the vehicle, usually in auction. You are credited for the amount of the sale.
4) You owe the remaining amount.

Example: Remaining car note is $11,000. The lender spends $500 on repo, make-ready, etc. You now owe them $11,500. The lender sells the vehicle at auction for $5000. You owe them $6500 ($11,500, less $5000).

I asked them for proof of what the sold it for? and they wont give me proof anything. Can they do this?

Yes. Demand, in WRITING, that they provide a FULL accounting for the amount they claim.

 

[cjbrown929]

Jet X is correct. Just to make it clear, the interest charges are pro-rated against the amount of time the loan was active. In your case, the actual payoff on the loan should reflect 4 months interest.

Question: had the loan already been approved?