“A car loan charge-off is a term used by lenders to describe uncollectible debt from borrowers. This usually means that the borrower hasn’t made any payments for an extended period of time (usually 120 days or more), and that the vehicle may also have a high likelihood of being repossessed.
If you’re a borrower who falls behind on payments or can no longer make payments, your credit score will suffer. Voluntarily surrendering your vehicle won’t lessen the impact on your credit score, but it might enable you to save face with the lender — which could have a positive influence on future dealings with the business. “