How to Write a Car Loan Surrender Letter

If you can’t keep up with your loan payments, you can write a car loan surrender letter to your lender to voluntarily surrender your vehicle.
Written by R.E. Fulton
Reviewed by Jessica Barrett
If you can’t keep up with your loan payments, you can write a letter to your lender to voluntarily surrender your vehicle. 
Although surrendering your ride still ends with the car back in your lender’s hands, your
credit score
won’t take such a bad hit and you’ll avoid the bad feelings a repossession creates. But signing a
car loan
agreement always comes with a risk of repossession, so knowing how to surrender a financed car is important.
Car loan expert and
car insurance
broker app
is here to walk you through everything you need to know about how to surrender your car to a lender. We'll also show you how to lower your car expenses using our
trusted insurance comparison app

What is a car loan surrender letter?

A car loan surrender letter notifies a lender that you can't keep up with payments and will return the vehicle. By notifying the lender and initiating a voluntary surrender, you can prevent defaulting on the loan and repossession of your vehicle. 
Because even a voluntary surrender can hurt your credit score, you should think of a car loan surrender letter as a last resort if you’re unable to keep up with payments. Consider all your other options, first:
  • Arrange an alternative payment agreement with your lender that takes some pressure off your finances
  • Trade in the car if your balance is less than the car’s value 

How to write a car loan surrender letter

Because a car loan surrender letter will negatively impact your credit score, it’s a serious decision. But if it’s your only option, it’s a smart move to prevent forceful repossession. 
Here’s how to surrender your car to the bank with a car loan surrender letter: 
  • Identify yourself and your vehicle. Be sure to include an account number so that your lender can match your letter to your records. 
  • Explain that you’re unable to make payments and intend to surrender the car.
  • Provide contact information so that your lender can reach you. 
  • Request signature confirmation of delivery if you’re sending the letter by mail.
  • Keep a copy of the letter for your records.
Once you’ve submitted a surrender letter, call your lender to arrange a safe time and location to drop off your vehicle. If you don’t want to send the letter by mail, you can also drop the letter off along with your vehicle. 
A voluntary repossession won’t wipe away your debt—you’ll still be responsible for payments after you surrender your car. Your lender will try to sell the car on your behalf and you’ll be responsible for your outstanding balance minus the sale price. This lower balance is known as the
deficiency balance
Key Takeaway Writing a car loan surrender letter won’t erase your debt, but you’ll likely pay a reduced balance if your lender can sell the vehicle. 
Make auto loan refinancing easy with PriceProtect™
Make auto loan refinancing easy with PriceProtect™
icon4.7/5 rating on the App Store | Trusted by 5+ million customers and 7 million cars
icon4.7/5 app rating | Trusted by 5M+ drivers

What’s the difference between voluntary surrender and repossession?

The main difference between voluntary surrender and repossession is that voluntary surrender allows you to avoid the chaos and humiliation of a forceful repossession. 
When you surrender a financed car, you’ll still be responsible for a deficiency balance—and voluntary repossession will still affect your credit score. But writing a car loan surrender letter shows future lenders that you took responsibility for your debt rather than forcing the lender to take drastic action.  
The bottom line: even though it’s not ideal, it’s easier to repair your credit after voluntary surrender than a repossession
Key Takeaway Voluntary surrender will impact your credit score, but it shows future lenders that you’re responsible and won’t force them to repossess your car. 
MORE: Does refinancing a car hurt your credit score?

Save money with cheaper car insurance

If you need some extra cash to help with your car loan payments, try shopping for cheaper car insurance. 
is a
trusted insurance comparison app
that helps you save time and money on all your car expenses, including insurance. Answer just a few easy questions and Jerry will compile quotes that meet your coverage needs from 50+ insurance companies.
Pick the one that best suits you and Jerry will handle all the paperwork, phone calls, and even help you cancel your old policy. The average Jerry user saves $879 per year on car insurance!
“A super easy app for great savings. I gave them my information and quotes from
very quickly! I’m saving $108/month.” —Kiyoshi A.
Haven’t shopped for insurance in the last six months? There might be hundreds $$$ in savings waiting for you.
Judith switched to Progressive
icon savingsSaved $725 annually
Alexander switched to Travelers
icon savingsSaved $834 annually
Annie switched to Nationwide
icon savingsSaved $668 annually
Reduce your monthly car payments in minutes?
Find out if Jerry can reduce your payments by an average of $150/month
Check your rate!

Easiest way to compare and buy car insurance

No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
Find insurance savings