How bad does a car repossession affect your credit?

AnswerHi Not as bad as you might think. FOr sure, it goes on your credit report, but the way credit people look at it is quite perverse, and I speak from experience today folks.

Now you have had your car repossessed, you are not making a payment on it. So that means, to the finance companies, that you have a bit more disposable spending money, and they want you to spend it with them!

Now, having a car repo'd can be embarrassing, but believe me, it does not mean you can never get another car on credit for 7 years or whatever. You can go out in 3 months and get another car, no real problem. The problem will be this. You know the ads on tv that say Zero percent financing for the very well qualified? Well, that will never be you. You will be qualified, but you can expect that rate to be more in the region on 16 to 20 percent, and that can make that car quite expensive, especially if you have had money troubles which lead to the repo in the first place.

Don't get me wrong; I'm aware that in some parts of the country with no transportation alternatives, losing a car can be devastating if it means you can't get to work by bus or subway or feet or bicycle or brother. If you can still get around without the car, the money you've just saved can be a blessing, so I hope you fall into that category.

One more thing. Once the finance company repos that car, your responsibility for it ends. You do not have to pay the towing company, and if you get a letter telling you how much the car was sold for at auction YOU DO NOT have to pay the balance between what you owed and it's auction price. They are not asking you to; it's just a "courtesy letter." DO NOT PAY another red cent on that car to ANYONE for ANYTHING.