Is it a good idea to voluntarily hand over a vehicle, when you have taken a title loan out on it?

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Is it a good idea to voluntarily hand over a vehicle, when you have taken a title loan out on it?

I had recently taken a loan out on my car. Since then it has been stolen and my boyfriend lost his job. The car was found today, but no longer in a driving condition as far as I know. I decided to voluntarily give the car to the loan company but after talking to them found out there was some hidden fees. The loan was for $700, half the worth of the car. Some of the fees include $100 towing, $150 yard holding fee, $50+ cleaning fee, and a couple others which may have slipped my mind. Would allowing to be repossessed be a better, cheaper option?

Asked on December 29, 2011 under Bankruptcy Law, Arizona

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I would not allow the vehicle that you are writing about to be repossessed. The reason is that a repossession is a blemish on one's credit report. Secondly, if you had insurance for the vehicle you should be able to simply pay off the vehicle.

Even if you do not have insurance for the vehicle, if the loan was for $700.00, I would pay off the loan and simply have the car taken to a place that buys vehicles for parts in that donating it to a charity will not get you much of a tax break in the condition that it is presently in.


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