How much a voluntary repossession affects your credit depends on your specific credit situation at the time. For this reason, there is no set amount of points your credit score could drop, but it's going to drop whether you give up your car voluntary or it's repossessed. However, you may be able to prevent having to give up your vehicle if you take action early enough.

Voluntary Repossession vs. Involuntary Repossession

How Much Does a Voluntary Repossession Affect Your Credit?When it comes to repossession, there are two ways it can happen: you can surrender the car yourself (voluntary repossession), or wait until a recovery company comes and takes it (involuntary repossession).

If you choose to give up the vehicle yourself, it’s a voluntary repo. But just because you give up the car voluntarily doesn’t mean you avoid the consequences of repossession. When you voluntarily surrender the vehicle, your credit score still drops and it shows up on your credit reports, but you avoid some repo fees and make it easier for you to work with your lender.

If you don’t voluntarily give up your car, an involuntary repossession occurs. While you could try and hide your vehicle, the recovery company is eventually going to find it and seize it without warning. You also have to pay additional repo fees since the lender also has to pay the recovery company for their services. If you’re already tight on money, this is an added financial burden that could've been avoided.

Preventing Repossession from Happening

Did you know that you may be able to prevent a repossession from ever happening? It’s possible, but you aren’t going to be able to unless you take action early on.

The key is to reach out to your lender as soon as you think you may miss a payment and let them know what your situation is. Most of the time, they try to help the best they can, and want to avoid a repo as much as you do.

Your lender may allow you to skip a payment and add it to the end of the loan term, or add it to your payment the following month. It really depends on your situation, and what the lender allows.

Even if they can’t help you, at least you know that a repossession may be coming and you can prepare for it by arranging to return your car voluntarily in the event you can’t make your payment.

The Bottom Line

You may be able to avoid a repo if you reach out to your lender ahead of time. While not every lender is capable of helping you, it doesn’t hurt to ask. If you can’t avoid repossession, your best bet is to voluntarily give up the vehicle to avoid the repo fees and the added stress of your car being taken unexpectedly.

If you’ve dealt with repossession in the past and you need an auto loan now, Auto Credit Express wants to help. We work with a nationwide network of dealerships that have lenders available to work with people in various stages of bad credit. We'll work to match you with a dealer near you if you get started by filling out our free and simple car loan request form.