January 16, 2006

Hi Tony

I have a couple of questions. I just purchased a car - actually 10 days ago, and I have been reading your horror stories. My sounds very similar.

I went to a car dealership and unfortunately my credit is not very good, so naturally my interest rate is going to be sky high . . . which I figured would be the case.

However, I went ahead and purchased a van with 80,000 miles on it at $400 a month and noticed a couple of problems with it after I drove it home. The car dealership has the car right now and is going to fix it.

My question is can I just give the car back? Can I call the Finance Company and tell them that I cannot afford the car? What are the ramifications if I just don't pick the car up?

My other problem is that the car dealership has 2 checks they are holding for my down payment totalling $1500. I already gave them $300 towards it which they have already cashed. Can I put a stop payment on those checks?

Thank you for your help!

Mindy C.

Answer:

Hi Mindy,

You cannot back out of the deal once the paperwork is signed. If you give the car back at this point it will go on your credit record as a repossession. The Finance Company will sell the vehicle at auction and you will be liable for what ever amount is left unpaid - plus fees and expenses.

You could end up owing more than when you started, except you won't have the vehicle anymore. If your credit is shaky now it will be completely shot if you give the car back.

As far as the checks go if you put a stop payment on them the car dealer will take you to court to collect. Then you'll be stuck paying court costs and attorney's fees too.

Listen Mindy, you bought the car and you agreed to make payments and make good on the checks. Live up to your obligations and go on with your life. If you make your payments on time and get the van paid off you'll be able to get better terms on your next vehicle loan.

In the future take your time and sleep on any car deals before you sign anything. You don't want to rush into any bad decisions in the future.

All my very best...

Tony Iorio