Imagine that you buy a car and realize that you simply do not want the vehicle, and you want to cancel the car loan. In many cases, people decide that they have not made the best choice and want to cancel the loan, and then try to contact their lenders to cancel the loan. Unfortunately, there is not a "buyer's remorse" clause when it comes to vehicle purchases, and it can be quite difficult to cancel the loan, but it can be done in most cases if necessary.
What Do I Do?
It should be noted that there will be penalties attached if you do decide you want to cancel your car loan. However, the first thing that a person should do if they desire to cancel a loan is to contact the dealership immediately. The longer you have the car, the less it is worth, which is something that is taken into account by the dealer when they determine how much you owe.
If you call within a week, the dealership will in most cases just take the vehicle back, making it all a matter of paying money instead of a more complicated approach. The second thing to do after that is inform the bank of what exactly is going on, and inform them that the dealership has decided to take their vehicle back.
After that, all that one needs to do is pay the interest on the vehicle that has accumulated while it was in your possession, since interest accrues on a daily basis. If it's on a monthly basis, it will be set to zero and then set to a daily rate.
What if They Don't Take Back the Vehicle?
The best thing to do in the situation where the dealership will not take back the vehicle is to sell it. Be sure to contact the finance company for the payoff balance, so you can know how much you will have to pay to get out of the contract.
There is another option; you can refinance the vehicle. If you don't like the terms, take the contract to another lender where they can work out another deal. They can reduce the interest rate, lower the monthly rate and even set a longer loan term to make you feel more comfortable in the vehicle.
Another option is a voluntary repossession. By doing this, you're letting the dealership take back their vehicle and try to sell it again for a price that they set later. If the selling price is lower than what you owe, you are held responsible for making up the difference.
Canceling a car loan can be something of a hassle and headache. The good thing is that there is help for those people who change their mind, and if acted on quickly enough, there is the chance that there will only be minimal damages and charges associated with the process.