My 19 year old step-daughter purchased a car about 5 months ago from a good-looking salesman. She paid too much for too little, but you really can't convince her of that, 'cuz I'm sure we all remember how smart we were at 19! She's "currently" current on the payments and insurance, but it's a struggle. She's getting ready to go active in the National Guard, spending the next 6 months down south for training, then a year overseas. We're trying to get all the specifics on what she now owes, what the car's worth, etc., but it's like pulling teeth! I'm not sure if it might be better for her to keep the car, and keep making payments on it while she's gone, or if there might be some way she can surrender the vehicle back, and put the payment money into savings to have a good down payment when she gets back? I know this might be a tough one to give an opinion on without all the specifics, but I was wondering if anyone has been in a somewhat similar situation, and how to approach this. Thanks in advance!
Very few things are as devastating to a credit history as a vehicle reposession, and it doesn't make any difference at all if its voluntary or not. If it were me, I would keep the car if at all possible, maybe look at restructering the financing to make it easier while she's in the service. You might also check out Soldiers and Sailors relief, which is a federal law designed to help out service men and women when their service interferes with their credit payments. I don't know if it would apply in this situation, but it can't hurt to find out.
Yes the soldier's and sailors relief act is very beneficial and I'm sure she can use it to her advantage. 1. She would have had to have the loan before enlisting. Which it sounds like she did. I used it after I enlisted. I too at the age of 19 thought I knew everything and bought a car on my own. I ended up with a 24% interest rate and thought I had a great deal lol. Joined the Army and because of the act it was automatically dropped to 6%. A huge savings to me. I truly did get lucky because I didn't join the army knowing about the act. It wasn't until I got to basic and the Drill Sergeants explained it to all of us.
