How to Return a Car on Credit

Returning a car that you financed and are still making payments on is called voluntary repossession, according to bills.com. Usually, consumers who seek voluntary repossession have fallen behind in their payments and realize they no longer can afford the car. Rather than wait for the lender to repossess it, the consumer decides to return it himself. A voluntary repossession and a regular repossession will have the same negative impact on your credit rating. Both will be listed on your credit report as repossessions, and will remain there for seven-and-half years.

Instructions

1

Consider other options first. Can you protect your credit rating by selling the car or earning extra money to afford the payments? If those options aren't possible, prepare to return the car to the lender. The main benefit of a voluntary repossession, according to bills.com, is that costs associated with the process are often significantly less than those associated with a forced repossession. In a forced repossession the lender incurs costs such as hiring a tow truck operator to find your car and take custody of it. The lender can then file suit against you to recover that cost as well as related fees associated with the repossession.

2

Find the customer service telephone number for your lender by checking one of your statements. Dial the number and ask for the automotive loans department. Explain your situation and tell the representative that you are seeking a voluntary repossession of your car.

3

Make sure you fully understand the terms of the voluntary repossession and what will happen. Ask the representative to explain the entire process. Even in a voluntary repossession the lender has the legal right to collect any balance remaining on the debt after the car is sold at auction or to another private buyer, according to bills.com. The remaining balance is called a deficiency balance. The lender could grant you a payment plan to repay the deficiency balance or he could file a lawsuit.

4

Make arrangements with the representative to turn over the car. Remove all your personal belongings and follow the lender's instructions for surrendering it. Sign the required paperwork when you surrender the vehicle and await further communication with the lender regarding any further financial responsibility.