If you voluntarily surrender your car, you avoid some of the negative aspects of a repossession, such as the fees and the inconvenience of the recovery service taking your vehicle. However, even a voluntary car repossession negatively impacts your credit score and gets listed on your credit reports for seven years.
Why You Can’t Avoid Repossession by Surrendering Your Car
The truth is that if you’re faced with repossession, it doesn’t matter if you give it up yourself or wait for the recovery company to come and get it – it’s still going to drop your credit score and be on your credit reports.
If you don’t want to give up your vehicle but are faced with repossession, there are still a few options at this point. Before you even think about it, hiding your car from the recovery company isn't one of them.
The repo man is eventually going to find your vehicle, and they can seize it anywhere if it's out in the open at any time – even on your own property. If you try to hide it for too long, the recovery company can obtain a court order to seize your car.
How to Prevent a Repossession
You don’t have to be faced with repossession – there are ways you can try to prevent it from happening. You just have to put in some effort and act fast. The key is to reach out to your lender and explain why you think you may miss a payment. Just like you, lenders don’t want to deal with a repo, and they’re sometimes willing to work with you to avoid it.
Two common ways your lender could help you prevent repossession include:
- Deferment – Your lender may let you skip the next payment and either add it to your payment the next month or add it to the end of the loan term.
- Refinancing – If you’ve had the loan for at least a year, have been consistent with on-time payments, and now have a higher credit score, they may recommend refinancing. When you refinance an auto loan, you lower the monthly payment by either extending the loan term or qualifying for a better interest rate.
Even if your lender explains that they can’t help you, you’re going to be on better terms with them because you let them know ahead of time. Don’t be scared to speak up – you may be surprised by what your lender is willing to do to help prevent a repo.
Get a Car Loan after Repossession
If you ended up surrendering your vehicle and your credit score dropped, where do you go from there? If you’re looking to finance another car loan, we want to help.
At Auto Credit Express, we work with a nationwide network of dealerships that have the lending resources you’re looking for. All you have to do to get the process of getting matched to a local dealer started is complete our free and easy auto loan request form.