Wholesale Replacement Program?

[Surrender]

Has anyone ever been offered a Wholesale Replacement Program in lieu of redeeming their vehicle? I applied with USBank this morning and they refused to redeem my car, but rather offered me a different vehicle.

Needless to say.......I'm very leery.

[StaciMM]

I did this-they may have refused your car based on mileage...

I am VERY happy. We didn't like the vehicles (or payments) that we had and decided to go from 2 vehicles & payments to 1. (DH works nights, I work days.)

Our options were 1. to keep a high payment on a truck w/ bad gas mileage that had issues (needed brake work, windshield replacement, and tires), keep a moderate car payment on a car w/ decent gas mileage, high miles & wear & tear that has a balloon payment in 2 years (so we'd ultimately need to replace it anyhow as we would not want to sink another $7k+ into even if we had it) or 3. find a vehicle that we would want to have long term w/ a decent payment.

Of course, we wanted #3. We thought about saving up our payment $$ during the stay and w/ a $2500ish downpayment should have been able to finance a late model used car after discharge pretty easily. BUT vehicle #1 filed to lift the stay, and w/ having to give it back early-DH had to quit a 2nd job and therefore we wouldn't be able to save up that $2500. Plus, I realized that if vehicle #2 filed a motion to lift the stay, we'd be in Trouble (capital T, LOL) as we wouldn't even have a shot at regular financing til discharge-and we just had our 341.

Anyhow-I contacted 722redemption. There vehicles are all lease turnins, so 2-3 years old mostly and decent miles. They delivered our '02 Taurus on Monday of this week-it needed new windshield wipers (easy to overlook I suppose) but is otherwise in great shape. It has about 36,000 miles, more than 20,000 less than what we're giving up. Our payment is about $295 X 4 years, APR is high of course. By paying extra though we'll save interest and get it paid off sooner.

We could have taken our chances, waited til after discharge, but anything we would have gained in getting a better APR we likely would have lost in vehicle price. The total financed amount, including tax & fees, is about $9000.

[Surrender]

Stacii...

Again, your help is invaluable. Let me ask, however, where did you choose your new car from? What will my options look like? I did find out that an atty is mandatory for this endeavor, but the Bank will finance his/her fees in the new auto loan.

But where are my options for a new vehicle???

[StaciMM]

If you use the replacement program thru 722redemption.org, your attorney is not involved (no attorney fees).

Looking at our sales agreement, there was a $100 document fee, $15 title fee, and $10.50 temporary tag fee. (And sales tax.) Looking at the loan agreement, there is a $135 insurance fee-I asked and this is to protect the lender in case we never make a payment. There is a loan origination charge $250, Credit investigation charge $10, and collateral valuation charge $30 but there is also a credit of $290 to offset those.

They get in 10-12 new vehicles each week-can usually tell you what they have by Monday afternoon. They're late model lease turn ins, low miles, that have been bought at auction & passed an inspection. From what I recall, they tend to have Malibus, Tauruses, Cavaliers and similar. I think they had a Blazer at one point, but that was the only thing that was not a regular car.

The process is simple-you pick your car, they overnight you paperwork-you return it and they deliver the car to you, and drive their driver to a Greyhound Station.

[thompsoj]

When are you allowed to apply for this type of program? Before or after your 341 meeting? I have been advised by attorney to surrender my van because we owe much more than it's worth but I am afraid to be without a vehicle since I transport children to and from school and myself back and forth to work.

[StaciMM]

You would need to contact them after filing but before discharge. A couple of factors-if you have had an account w/ US Bank in the past that went into default, or if you do not have a year plus on a job, they may not approve you. Credit itself isn't too important-obviously as they only work with ch 7's. I'm not sure, but it might also hurt if you have prior repo's.

They require copies of paycheck stubs, auto insurance & driver's license. The bank will verify employment before giving the final ok. (I know they did our app because I had to get them another # to call, as the part time job DH was working is a newspaper distribution office and US Bank was trying to verify employment in the afternoon. The managers at the branch work from midnight til about 10/11 am-so I gave them the main # for the HR dept downtown.)

When are you allowed to apply for this type of program? Before or after your 341 meeting? I have been advised by attorney to surrender my van because we owe much more than it's worth but I am afraid to be without a vehicle since I transport children to and from school and myself back and forth to work.

[thompsoj]

I have been employed by the same company for more than 10 yrs., never had an auto repossessed and I am currently current on the auto to be surrendered. Hopefully, that means something.

[StaciMM]

Those should all count in your favor.

If you are surrendering, you should not make any more payments. If you go w/ 722redemption.com, you will have to put $500 down and then your 1st payment will be due 30 days after you get the car. The process can take as little as a week (to get them the paperwork they need, them to get the sales & finance agreement to you, you return it to them, and them to deliver the vehicle to you). If you are not in a rush, though, you don't HAVE to do it that soon-I think the maximum is 30 days from the time you're approved, and it has to be complete by discharge. If you have time to work with, then you can wait if they don't have a car you really want. They get new stock in on Mondays.

I have been employed by the same company for more than 10 yrs., never had an auto repossessed and I am currently current on the auto to be surrendered. Hopefully, that means something.

[sunshine08]

You can pre-apply if you want, we did, they just can't do anything until they have a case #. If you have filed you will probably get letter from car dealers that work with "less than perfect credit."

[StaciMM]

My opinion-

If you do not HAVE to get a car during the BK process, you're better off waiting til after the discharge. Worst case scenario, I think is you'll end up w/ similar terms to what you would have gotten with 722redemption.org. It is quite possible, though, that you'll be able to work out a good deal on a late model used car w/ a better APR after discharge. But, if you're facing the prospect of NO transportation, then 722 redemption is a good alternative.

If you are surrendering a vehicle, the lender can't come for it until after discharge unless they file a motion for relief of the automatic stay. And, that motion will result in a hearing-so you would have a few weeks notice at least.

Keep in mind that I used the replacement program and I'm very pleased. But that doesn't mean it will be the best alternative for everyone.

[AAAArt]

Question for Staci

My opinion-

If you do not HAVE to get a car during the BK process, you're better off waiting til after the discharge. Worst case scenario, I think is you'll end up w/ similar terms to what you would have gotten with 722redemption.org. It is quite possible, though, that you'll be able to work out a good deal on a late model used car w/ a better APR after discharge. But, if you're facing the prospect of NO transportation, then 722 redemption is a good alternative.
Keep in mind that I used the replacement program and I'm very pleased. But that doesn't mean it will be the best alternative for everyone.

Staci,
We had dinner tonight w/ my wife's cousin who had also filed Bk. Her 341 was Wed. and found out that she only filed on 2 cc's, not her house or her car. She's very upside down on her car. Owes $8000...KBB value $4000. Car has 85,000 miles. I suggested 722 redemption to her. She doesn't have a computer, so I'm researching some stuff for her.
Your posts re: 722 redemption seemed so positive, that I was surprised by your advice in this one.
I know that you said that their int. rates are high (How high are they?), but it sounded like if your total financed was only $9000 that you were getting close to wholesale price on the car. My assumption was that if you went through a dealer who specialized in dealing with people with poor credit, that you paid a high price for the car and high interest and that it was a real rip-off.
Why do you believe that it is better to wait til after Bk and then get a car as long as you have transportation? She has 3 more years to pay on the car and has been helped a great deal through the HR dept where she works and got a good attorney at a discount, but basically she is going through this with "her head in the sand"...(her words).
I'd like to give her info to make an informed decision and would appreciate any help that you or anyone elese could give. TIA, Art

[StaciMM]

If you have no choice-722 redemptions replacement program is an alternative. Such as-if you're 3-4 months past due on your vehicle and know that the lender will likely repo it as soon as you're discharged, you don't have alot of time to play with. But if you're current & can handle your current car payment - just don't want to keep going forever on a very upside down vehicle - my logic is this: continue to make payments on the upside down vehicle til you're 1-2 months after discharge & you'll have options on financing after discharge. People can get good deals after BK-someone in a BK loop just reporting getting approved at 12% for up to $10,000 and her BK just discharged. (That is less than 1/2 of what 722's apr is.)

If you have time to work with, then you remain in control and you'll pay less overall.

[StaciMM]

PS-If she can get redemption funding on her current vehicle, that is different than replacement funding on a new-used vehicle. It will depend on the age & mileage of her vehicle. The question she would need to decide is - does she want to keep her car long term?

If so-then redemption funding would be a good move. Her loan would probably be the area of $5000 (after adding the attorney's fee to work out the deal w/ the lender and the loan fees). I don't know her current APR or # of payments, so I can't really compare it to what she is doing - but if they did a redemption loan on $5k for 48 months, her payment would be about $167 and she'd pay back a little over $8000. If she paid it back over 36 months, she would pay about $200/mo and save nearly $1000 on finance charges.

And if she owes $9000 now, either scenario is a savings.

[cmachk]

StacyMM you out there?

I read on here that you used 722 redemption. We don really want to keep the truck because it has 150000 miles on it but i thought if they would redeem us we could pay it off and later trade it on. They said they cant do a redemption because of the mileage (which is fine) but they also said they cannot get a new loan for a diff car either? Our bk is not discharged yet is that why they are denying us? I thought it was a trial run saying "when" your bk is discharged we can do this or that? Am I wrong?