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