Voluntary Car Repossession

The major benefit of a voluntary repossession is that you won t have to face the auto lender s cost of repossessing the vehicle. In a voluntary car repossession you make arrangements to surrender the car to the lender without the intervention of a third party repossession company a voluntary repo is just as damaging to your credit as an. When you re behind on car loan payments the lender has the right to take back or repossess the vehicle sell it at auction and use the proceeds to pay down your loan balance.

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Although repossessions generally are involuntary you can opt to return the car on your own as well.

Voluntary car repossession. Voluntary repossession is a type of loan default where you surrender your vehicle back to your lender to be used as payment towards your outstanding loan balance. The emotional difference between the two can be day and night literally. You are unable to make the loan payments so the lender is taking the vehicle back. While in most states your lender can repossess your car at any time after you default on the loan a voluntary surrender is initiated by you the borrower.

You might consider voluntary repossession if you can no longer afford your auto loan payments and other options aren t viable. Understanding voluntary repossession. Voluntary vehicle repossession is a strategy that involves the owner of a vehicle choosing to proactively and voluntarily surrender that vehicle to the lender holding a lien on the vehicle usually because the debtor can no longer afford to make payments on the car loan. In a voluntary repossession you return your vehicle to your lender when you are unable to make payments.

Voluntary car repossession means that you can voluntarily return your car to the creditor thereby reducing your creditor s expenses in repossessing the car and reducing the amount of money that you owe to the creditor. Voluntary car repossession is definitely something to consider if you live in florida. Voluntary repossession is an immediate alternative to repossession which is when the lender takes action to seize the vehicle once your loan is in default per your auto. If you can t make the payments on a vehicle you re financing the lender can repossess the car.

Taking this step can reduce fees associated with a. You inform your lender you will not make payments going forward and that you want to surrender the car. But when you take your vehicle back to the lender or dealership before they send the repo man for it that s called voluntary repossession. A voluntary repossession makes sense when you know your car payments are unaffordable and an involuntary repossession seems inevitable.

Surrendering your vehicle and repossession are very similar in financial terms. When you agree to give up the car it s referred to as a voluntary repossession and is reported to credit bureaus as a voluntary surrender. It will be sold to recoup as much of the debt you owe as possible. Voluntary repossession also called voluntary surrender means that you return your car to the lender because you can no longer meet the terms of your loan agreement.