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Surrender vs. Sale When You Cannot Afford to Pay for Vehicle

Question: We are letting our atv go to repo, we are wondering if they can come back on us for what is owed? The atv was purchased with a credit card through the company that makes it. We have never had a late payment and we called to volunteer the atv back to the that company since I have lost my job. We would like to know if they can come back on us for the amount that is still owed on the atv?

Answer: The answer to both parts of the question is “generally yes.” A person who is unable to make payments on a vehicle is far better off selling it or trading it for a less expensive vehicle themselves. Repossessed and surrendered vehicles are generally sold very cheaply at auctions. If you sold the vehicle yourself you are likely to get more money. The secured party would have to consent to the release of its lien, in exchange for payment of the proceeds to it, but if it refuses, repossesses, and sells the vehicle for less it may not be able to collect any deficiency and may be subject to substantial statutory damages since such conduct is not “commercially reasonable.”