How To Cancel A Car Loan

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The CarsDirect editorial team is dedicated to providing our readers with the latest on new and used cars, expert opinions on which vehicles make the grade, and all the fun stuff in between.


, - May 26, 2016

A car loan can be hard to get out of, but it is not impossible. There are many reasons as to why a person may want to cancel a car loan, and they will find it there is little room for them to wiggle out.

  • If the car is brand-new and the customer has buyer’s remorse, some dealerships will allow one to return the car within a certain amount of time. Information about this should be listed in the auto loan terms.
  • If the car is defective and this is discovered within a certain amount of time after purchasing the car, one can refer to their state’s lemon laws about cancelling their debt and returning the car.
  • Refinancing a car may be an option to getting out of a bad car loan or an upside down car loan. Doing this can help find lower interest rates or more affordable monthly payments.
  • Find out the value of the car from NADA or Kelley Blue Book. With this information, one can use it to trade-in the car for a new vehicle with a pay-off arrangement.
  • Sell the car for the amount advised by NADA or Kelley Blue Book to a dealership or private buyer. Then one can pay-off the remaining balance out of pocket.
  • Sell the car to a private buyer that is willing to take over the payments, which puts them in a good position to refinance the car. (Make sure the lender knows the debt was transferred to another person. )
  • The worst way to get out of a car loan is to default on one’s payments. This will cause the car to get repossessed and one’s credit score to significantly drop.

Many of the ways to cancel a car loan will end up with the consumer losing money. Hardly ever does one break even. However, a little money lost now is better than thousands of dollars spent on a car that is not worth it.

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