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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Eric Schad
Answered on Jul 12, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“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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