Mom is 75. Beginning of memory loss/dementia. Her husband of 25 years recently passed after a brief illness and didn’t have any life insurance. She has no savings.
Her car payment and insurance are about $650/mo. She owes about $8,500 on the loan. Her $2,100 SS does not leave her any money after rent, utilities, car/ins payments, cell phone. I pay for her groceries and I’m just making ends meet for my immediate family. She won’t drive more than 1 mile to the post office and the grocery store because she’s afraid of getting lost.
She has decided to stop driving.
My question is if she voluntarily has the car repossessed it will affect her credit. At this stage in her life, would there be any reason she would need “good credit” to get into an assisted living/memory care facility? She has no assets at all. She is not going to try for any future loans or credit cards. Reality is that it’s all down hill from here with the memory issues.
Is there any possible reason that ruining her credit with a voluntary repossession would hurt her in the future she has left?
Pay off the loan and don't worry about mom's credit. At her age it isn't an issue anymore.
Having this out of sight, out of mind will ease your mom's worries.
They're not necessarily "not paying the value," but they have to make a profit reselling it, and selling to a dealer usually goes hand-in-hand with buying a replacement vehicle, not just a straight sale of the used car.
Sell car.
Pay out loan.
Second, get a loan of your own to pay off her car, and then resell it at a higher price. You might make a profit. Since your mom still has a loan, you can’t sell her car without the title.
Third, hug your mom again.
Lots of people have recommended Carvana, but there are other car-buying companies. (Carmax.com and wepaythemax.com are two examples, not endorsements.) Make sure you shop around to get the best deal. When they ask you why you are selling the car, don't give them a sob story, they will take even more advantage of you.
Confirm that there is no co-signer since their credit would also be at risk.
Best case scenario: you need to get a feel for the private party value of the car, using kbb.com or similar.
If it is more than the loan balance, you should consider trying to sell the car. You can find out from the lender how to most efficiently pay off the loan and transfer the title to the buyer.