What does a voluntary surrender of a car loan mean?
What does a voluntary surrender mean? I got laid off a month ago and I can't pay for my car loan. My family told me to voluntarily surrender my car to avoid a hit to my credit.
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Answered on Jul 12, 2021
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“A voluntary surrender of your car, also known as a voluntary repossession, is when you give the vehicle back to the lender with keys in hand.
Unfortunately, many people think this will affect your credit score less; it’s not true.
Whether you give it back willingly or unwillingly, your credit score will fall between 50 and 150 points.
Call your lender before you give the car back; they may be willing to work out a payment plan with you.
Meanwhile, there are a couple of things you can do to help make payments on your car and avoid the credit hit:
- search for a new, temporary job
- apply for unemployment benefits
- ask a family member or friend for help
- use a credit card to help make payments
Ultimately, if you decide to surrender your car, you can use public transportation, a rideshare service, or pay for a car rental as needed.”
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