How do you return a car you can't afford?
Asked by: Ms. Dixie McGlynn | Last update: August 29, 2025Score: 4.6/5 (49 votes)
What happens if I can't pay my car and want to return it?
If you return the car to the lender in a voluntary repossession, the lender will likely sell it. It will apply the proceeds of the sale to your car loan balance, after reimbursing itself for the costs of sale and certain fees.
What if you can't afford your car payment anymore?
Contact Your Lender
Contact your lender as soon as you know you won't be able to make payments. Many lenders are willing to work with borrowers to avoid vehicle repossession and get their payments under control. The sooner you get in touch, the more options your lender may be able to offer.
Can I return my car to the dealership if I can't afford it?
Bottom line. Car dealers are usually not obligated to let you return a car. In most cases, it's up to dealer policies (unless otherwise required by law).
Can I let my car go back if I can't afford it?
In most cases, you can ask your lender to take the car back, however if you still owe more on the car than what the pay off value is, you will have to pay the difference.
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How do you get rid of my car if I can't afford it?
- Sell the Car.
- Renegotiate the Terms of the Loan.
- Refinance the Loan.
- Pay off the Loan.
- Consider a Voluntary Repossession.
- Other Options.
- Getting Out of a Car Lease.
How bad is a voluntary repo?
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.
How do I get out of a financed car?
- Renegotiate your loan terms. ...
- Refinance your car loan. ...
- Pay off your auto loan early. ...
- Sell your car. ...
- Consider voluntary repossession. ...
- Default on your car loan (not recommended) ...
- Consider filing for bankruptcy (not recommended)
Can I sell my car back to the dealership if I can t afford it?
So, can you sell your car back to the dealership if it's still under finance? Yes, you can. However, there are specific steps you need to follow to ensure the process is legal and smooth.
How badly does returning a car affect credit?
Having your car repossessed or surrendering it voluntarily is seen as a major negative event by lenders. They'll view you as high-risk. Expect your credit score to take a big hit, maybe over 100 points or more. That makes getting approved for financing in the future much harder.
What is the penalty for returning a financed car?
Voluntary return is just calling the finance department and telling them you're not going to pay. It just lets them know it's gonna be an easy repo...which brings us to... It's still repossession. They will sell the car at auction for pennies on the dollar and you will owe any remaining balance.
What if I can no longer afford my car lease?
Contact your lessor as soon as possible.
The dealership or company you leased your vehicle through – your lessor – may be willing to work with you on an affordable payment plan, especially if you have made timely payments in the past. If you do reach an agreement, get it in writing in case you need to dispute it later.
How bad does a repo hurt your credit?
A car repossession can significantly damage your credit score, potentially causing a drop of up to 100 points or more depending on your overall credit history. It remains on your credit report for up to seven years, impacting your ability to secure favorable financing terms in the future.
What should I do if I can't afford my car payment anymore?
- Request a loan deferment. ...
- Refinance your auto loan. ...
- Trade in your car. ...
- Find someone to take over your car payments. ...
- Sell your vehicle. ...
- Give your car back. ...
- Allow your car to be repossessed. ...
- File for bankruptcy.
Can a dealership repo my car for not paying down payment?
Even if you are a few days late on your car payments, the dealership has the right to repossess your car. Under California law, the dealership can also start the car repossession process if the sales contract is breached. For these reasons, it's imperative that you understand your agreement with the finance company.
Can I back out of a car loan after signing?
One general rule of a car purchase is that your signatures on the paperwork are legally binding. Under normal circumstances, there is little opportunity to back out of the sale after signing.
What if I don't want my financed car anymore?
You can keep paying the loan, you can allow the car to be repossessed or you can try to sell the car for as much as possible and then pay off the loan with the proceeds. If the car is worth less than the loan you would have to add additional funds to make up the difference.
Do dealerships buy back your car?
A traditional trade-in allows you to sell your car to a dealership during any point of ownership, and factors like condition, age, mileage, and market value will be used to determine the amount of the trade-in offer.
How to get rid of a car you can't afford?
- What Happens When I Miss a Payment? ...
- Talk to Your Lender. ...
- Refinance the Loan. ...
- Sell, Trade, or Try Transit. ...
- Use Home Equity. ...
- Voluntarily Surrender Your Car. ...
- Car Repossession. ...
- Get a Budget, Stick to It, and Make Your Car Affordable.
Can I just give my financed car back?
Most of the time, unfortunately, you can't return a financed car. Although there are a few scenarios where it may be possible (more on that below), they are few and far between.
Can I walk away from a car loan?
Pay off the car loan
If you are struggling to meet your monthly payments, paying off your loan entirely may not be possible. But if you have the financial backing to pay it off early, you can walk away and get rid of the financial stress. One way to pay off your loan is to pay one large lump sum.
How to get auto loan forgiveness?
Generally, you can apply for hardship relief on the lender's website. You'll need to provide certain information and documentation verifying your situation during the application process. This may include: Loan details like the remaining balance, interest rate or APR and payment history.
How to get rid of a financed car?
- Consider Selling the Car. Getting rid of your mode of transportation isn't ideal, but if you can't stick to your repayment schedule, you may lose the vehicle anyway. ...
- Negotiate With Your Lender. ...
- Refinance Your Auto Loan. ...
- Voluntarily Surrender the Car.
How much will my credit go down if I surrender my car?
Repossessions, collections, and court judgments can remain on your credit report for up to seven years, reading as a derogatory mark and dropping your credit score by 100 points. Repos can also affect your ability to get a vehicle loan in the future since the repo is on your credit report.
Is a surrender better than a repo?
Benefits of Voluntary Surrender for Consumers
It can result in lower fees and costs associated with the return of the vehicle, as opposed to the fees incurred during repossession. It may allow for more control over the return process and timing, reducing stress and embarrassment.