Voluntary surrender of vehicle form 2025

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Voluntary surrender counts as a derogatory or negative mark and will stay on your credit reports for up to seven years.
Avoiding Further Damage to Credit: If you are unable to make payments, voluntarily giving up the car may be more favorable for your credit score than having the bank repossess it. Voluntary repossession can be viewed slightly better than involuntary repossession on your credit report.
How to perform a voluntary repossession of your vehicle Proactively inform your lender that you are unable to maintain making timely, monthly payments. Work with the lender to arrange a time and place for dropping the vehicle off.
Voluntary repossession can have a significant negative impact on your credit score. This record will stay on your credit report for seven years, potentially making it harder for you to get approved for new credit during this period.
Credit Score Impact: A voluntary repossession can lower your credit score by 100 to 150 points, depending on your current score and credit history. The exact impact varies based on individual circumstances.
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Start the letter by identifying yourself and the property. The lender will need to identify your loan, so include an account number. Give them your name, address and contact information. Tell the lender that you are voluntarily giving the item back because you can no longer make the payments.
While surrendering the vehicle voluntarily may be seen more favorably by lenders compared to repossession, it can still result in a substantial drop in your credit rating. Additionally, you may remain liable for any shortfall balance after the vehicle is sold at auction, further adding to your financial obligations.

voluntary surrender of vehicle