Whether or not the repossession filed against you was voluntary or not, your credit will still be affected. In some cases, credit scores can drop as much as 100 points in a voluntary repossession.
In a normal repossession, you can also expect your score to decrease by 100 points or more. However, there are a few ways you can stop the repossession efforts and prevent a credit disaster.
What is Voluntary Repossession?
Voluntary repossession is when you return the car to the dealership yourself, in order to save face from having the repo man coming over and causing a scene.
While you can avoid some expensive repossession fees when you voluntarily get your car repossessed, your credit will suffer just as much as a regular repossession.
This is because credit reports do not have different categories for different types of repossessions, all repossessions are viewed as one. Also, just because you turned in your car does not mean you are free of any liability. When your car is taken back, the car is sent to auction.
The goal of the auction is to sell the vehicle at the highest price possible. If the price of the vehicle does not reach the amount needed to cover the value of the car, your lender can sue you in court for the difference. Just because you turn in your car does not mean you’re off the hook for any additional costs.
How to Stop It
Scared about getting your car repossessed? Instead of sitting and worrying about it, take action. The first thing you should do is call your lender and tell them about your situation. Believe it or not, your lender wants to help because they want their money.
Consumers call their lenders every single day to tell them about their payment struggles, and most of them are willing to work with you and your budget to get your car paid for. Some lenders will allow you to miss a payment or two in exchange for adding it on at the end of your payment period.
If you are looking to buy a new car but are in need of financing, CrediReady can help. Our nationwide network of trusted dealers and verified lenders work with buyers in all credit situations. Take a moment to fill out our free no-obligation loan inquiry form and start shopping for your dream car today!