By voluntarily returning the vehicle, you are taking some responsibility for the debt you owe. For this reason, lenders may consider a voluntary surrender to be slightly less negative than a repossession. The lender will resell the vehicle, and the proceeds will go toward the balance you still owe on the loan.

Can you turn a financed car in?

Can you trade in a financed car? The answer is yes, absolutely! However, you should know that trading in a financed car doesn’t make the loan go away: You’ll still be on the hook for the remaining balance, even after you’ve turned the car into the dealership.

What happens if you do a voluntary repo?

To make a voluntary repossession, you notify your lender you will no longer make payments and wish to return the car. Your lender will also add in various fees, penalties and repossession costs. The deficiency becomes an unsecured debt that you are responsible to pay.

What should I do if I choose to voluntarily turn in my car?

If you are going to voluntarily turn in your car you will need to call the finance company and set up a time where you can bring the vehicle to them. It is critical you get a business card or use some kind of identifying method to show who you left the vehicle with.

Who is responsible for the loan on my car if I voluntarily?

So in the long run, you will be responsible for part of the loan if you voluntarily surrender your vehicle. Depending on how much you owe on the vehicle and how much the lender resells the vehicle for will determine the deficiency balance.

What happens if I turn my car over to my lender?

Turning your car over to your lender voluntarily carries with it the same financial implications as an involuntary repossession. You’ll have to sign documentation from the lender accepting that you’ll still be held accountable for the balance due on the note after the car is sold at auction even though the repo is voluntary.

Can a voluntary repossession cancel out your car loan?

Voluntary Repossession Doesn’t Cancel out Your Loan. Turning in your vehicle doesn’t let you off the hook for your auto loan. The lender will auction or sell your vehicle and apply the sale proceeds to your loan. If the sale price is less than your loan balance, you’re still responsible for the remaining balance.