Better To Sell Than Risk Repossession
You get yourself a new car with the assistance of a loan or hire purchase scheme. Beaming in pride, you start using the car. Over time however, life circumstances cause you to skip an instalment or two in your repayments. Before you know it, you’ve skipped enough number of instalments that the car repossessor now knocks on your door with valid papers to repossess your car. You say bye bye to your car but your nightmare does not end there.
It is challenging indeed (and emotionally draining) to have to deal with repossession. Once your car is repossessed, your car is at the mercy of the financial institution’s taking of steps to dispose off your car for the best price - usually through an auction. You will be lucky if they manage to sell off your car at a price high enough to cover your existing outstanding loan. Otherwise, you will still have to top up the remaining outstanding amount. Worse still, your name gets into a bad credit report.
Having an adverse credit report will reduce your chances of getting another loan in the future as financial institutions are wary of granting credit to someone who has a previous record of defaulting on payments. Your first and foremost aim is to ensure that your name does not end up on the bad credit report. In Malaysia, adverse credit records are maintained by the banks through a system known as CCRIS with Bank Negara Malaysia’s approval. Previously, there was also CTOS, which until recently had made many enemies amongst those who have been sued by financial institutions.
It is therefore paramount that you do not let your car loan get so far behind that you risk repossession over your car. Try to talk to your financial institution for breathing space if possible. Or ask for restructuring of the loan or hire purchase. If both don’t work, it is time to try to sell the car yourself than risk repossession.
By selling the car yourself, you are in control over the selling price. If you are a good negotiator, you might be able to sell your car for a good price. It is definitely better than to leave your car at the mercy of the auctioneer. Not only that, you need not waste additional funds having to pay for cost of repossession, fees, penalties and what else which the financial institutions would impose on the whole repossession exercise. If you can’t sell your car directly, consider trading in your car for a cheaper car at the second hand car dealer. With that, you will still have a car to use and still remain clean as a credit worthy wise.
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