Can I give my car back to the finance company?

In the current economic state, “Can I give my car back to the finance company?” has been a common question for many people looking for ways to alleviate financial pressure. This document will delve into the legal and cost aspect of giving back a financed car to highlight the process, repercussions, and other options to consider during this time. 

The present hard financial times have necessitated this information to promote consumer awareness while considering the best way to conduct their financial needs or times. Whether your economic status is affected or revisiting your need is paramount.

Understanding Voluntary Surrender

Can I give my car back to the finance company? Yes, Voluntary surrender is the solution. Voluntary surrender is a legal term that means submitting to the authorities out of free will. It happens when the person is filed with formal charges or even more when the warrant for arrest has been issued. 

Therefore, voluntary surrender is an act in which the person voluntarily shows that he knows about the charges, and his surrender to law enforcement or other authorities is voluntary. Likewise, the motives that drive the individual for voluntary surrender may differ. 

For example, some individuals do this because they expect less harsh treatment and a milder sentence from the court that will show that the person appreciates the freedom granted. In contrast, others may prefer voluntary surrender to avoid the stress of being found and arrested. 

On the other hand, from a strategic legal perspective, voluntary surrender is seen by some as a move that could minimize possible charges or make the whole legal process more comfortable – mainly if one is grounded in the recommendations of the lawyer.


There are several things to consider with voluntary repossession:

  • Loan Type: The process, leniency, and impact differ based on the kind of loan you have. Common car finance methods comprise:
  • Auto Loans: Traditional financing is characterized by vehicle ownership following full repayment. Its premature termination may be connected with additional costs.
  • Leases: Rental agreements allow you to own the delivered goods afterward. However, termination comes with immense fines.
  • Loan Development: The loan repayment phase likewise matters. Some contracts make it easier to surrender the car following a particular payment level — an oft-used criterion is nearly 50% of the total sum.
  • Financial Gap: You may still be in debt despite the voluntary initiation of repossession. The dealer will sell the item and use the proceeds to mend your balance. If the profit from the sale does not cover the designated sum, you will still owe it.

The Process of Voluntary Surrender

The following is the process of voluntary surrender:

  • Communicating with the Lender: The first step in voluntary surrender is to get in touch with your finance company and notify them of the situation. Even if there are no immediate steps to retain the property, it is essential to be transparent, as a few lenders may suggest alternative approaches to help you retain the vehicle.
  • The Surrender of the Vehicle: If voluntary surrender is the only option, the lender will instruct you on how and where to return the vehicle.
  • The Post-Surrender Process: After you return the car to the lender, it will be sold at an auction. The proceeds collected from the sale are usually used to pay off the total outstanding loan amount.

Considering the Consequences

While leasing may seem like a quick fix, there are some drawbacks:

  • Impact on Credit Score: Voluntary repossessions can negatively affect your credit score, making it harder to get a loan in the future.
  • Deficiency Balance: You are likely to be responsible for the balance of the loan after the car is sold. This can be a huge financial burden.
  • Travel issues: You will have to turn the car around and find another vehicle.

Costs of early termination provisions: Some loan agreements have early termination penalties.

Alternatives To Voluntary Repossession

Before leasing your automobile, remember to explore your alternatives:

  • Communicate with the lender: Open communication is key. Lenders are willing to work with you on credit changes, such as extending the term of the loan or lowering the monthly payments.
  • Sell ​​the auto yourself: Selling the car privately can earn you extra cash than a lender might from selling it once you repossess it. The proceeds can then be used to pay off the ultimate debt and probably keep away from affecting the loan.
  • Refinancing: If your credit is right, refinancing with a lower hobby charge can let you control your monthly bills.
  • Loan consolidation: Consolidating your vehicle mortgage with other loans can reduce the economic burden of a single low-interest loan.


Can I give my car back to the finance company? While it is possible, voluntary surrender should be considered a last resort due to its impact on your price range and credit score rating. Exploring options, communicating openly with your lender, and knowing the consequences are crucial steps before making this choice. Voluntary surrender can provide comfort in certain situations, but it is essential to approach this option with a full understanding of the long-term implications.

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