“Some lenders will forgive auto loans, but this requires the borrower to voluntarily turn over the car. However, just because the lender takes back the car does not automatically mean the loan is forgiven. If this is your only option, you should call your lender to ask how they will work with you.
It would also be a good idea to request a written statement from your lender, which says that the loan is fully satisfied and they will not report the return of the car as a repossession. “