You can voluntarily surrender the vehicle to your lender or dealership on your own. To make a voluntary repossession, you notify your lender you will no longer make payments and wish to return the car. After repossession, the lender will sell the vehicle and send you a statement of realization.
How does a voluntary surrender affect your credit?
Voluntarily surrendering your vehicle will have a substantially negative impact on your credit scores because it means that you did not fulfill the original loan agreement. When you voluntarily surrender your vehicle, the lender will sell the car to recover as much of the money owed as possible.
How does a voluntary repossession of a car work?
The process is voluntary because you request and arrange everything instead of waiting for your lender to come and get the vehicle. When you get a lease or auto loan, the vehicle that you purchase secures the loan. In other words, your lender can take (or “repossess”) the vehicle and sell it if you stop making payments.
Is it better to surrender your car or have it repossessed?
Voluntarily surrendering your vehicle may be slightly better than having it repossessed. Unfortunately, both are very negative and will have a serious impact on your credit scores.
Can a lender repossess a car without notice?
When you finance or lease a car, you normally give the lender a security interest in the vehicle. Every state has its own rules regarding repossession, but having a security interest generally means your lender can repossess the car without notice if you default on the loan.
How long does it take to get your car back after a repossession?
As dictated by the NCA the credit provider must then deliver to you, a letter within 10 working days, indicating the estimated sale value of the vehicle. You may dispute the sale value if you are not pleased with it, you may then proceed by withdrawing your notice to surrender and resume possession of your vehicle once more.
