Car Repo Question

[gak555]

I received my Chapter 7 discharge last October. Currently I am making payments on a Mazda with a balance of about $23,000 and 86,000 miles driven. That loan was never re-affirmed. I was thinking of buying an inexpensive economy car for $13,000 - $14,000 and just allowing my car to be repossessed. Are there any holes in my strategy that I am not aware of ? Any imput would be greatly appreciated.

ps. I posted this same question elsewhere on the forum in hopes of getting a response

[bkdone]

Before you do that, weigh out what the interest rate is going to be on a
$14K loan, over the life of the loan. Also think about what the insurance rates will be for that new car, especially since insurance companies pull your credit before they issue a new policy. Each company rates you based on your credit rating, to decide if you are a good risk. Your rate may shoot through the roof, although it is a cheaper car. I learned this the hard way...I bought a Hyundai Elantra several years ago. The insurance was higher than our SUV, which was newer. My insurance guy could not figure it out.

Once you add up what the new car will cost, vs. the old car, then make your decision. Maybe call your insurance guy and see what cars are cheapest to insure, especially following a BK. Good luck.

[gak555]

Thanks, I didn't think of the interest rate and insurance aspect !