Best options for voluntary auto reposition

Most car buyers utilize their credits to buy a brand new or a used car. They secure car loans to finance the vehicle purchase and in return they provide monthly payments. The monthly payments are paid until the last day of the loan term or until the borrowed amount is paid off. Failure to provide the monthly payments might result to repossession of the vehicle. However, there are cases where the buyer returns the car to the dealership or the lender commonly called as voluntary auto repossession upon knowing that they can no longer pay for the financing.

Hand over the vehicle

In the event that your financial condition has suddenly change and you know that paying for the payment of the loan would be impossible, you can voluntarily hand over the car back to the dealership or the lender. Although this would not erase the debt that you have with lenders, this will save them from repossession costs that would be eventually charged to you. As soon as you return the car, the creditor would automatically have the option whether to hold the car as a form of compensation or sell it to other buyers. However, the lender is obliged to inform you of what they are planning to do with the car and the law provides you with all the right for a fair sale.

Important warnings

Always bear in mind that voluntary repossession reduces the amount you owe from lenders but this doesn’t save from paying the amount that you borrowed. The lender can also report your case to the three credit reporting agencies if they choose to and this could probably create a negative result on your credit record. Just make sure that you retrieve all of the personal properties from the vehicle such as video players or luggage rack for these is not included on the voluntary repossession. In case you failed to retrieve these you can demand for monetary compensation from the creditor.

Other applicable options

Instead of returning the car for voluntary repossession, you can also sell the vehicle to pay for the amount you owe from the lender. You must first contact the lender and determine the payoff amount. After doing this, you can place a price on the car and offer it on sale. Try to promote your sale through ads. If you are able to sell the car near the payoff amount, you only need to add some amount to pay for what you owe. This could be a good option since this will not affect your credit record.

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