When you know you’ll be faced with your car being repossessed, you have two options: voluntary or involuntary repossession. Both result in your car being taken back, but the choice to give up the car voluntarily is up to you.

The Differences

repossession, tow truckThe truth is that voluntary and involuntary repossessions have very small but important differences. The consequences are the same, and you’ll have a repossession marked on your credit report for up to seven years. Although the process stays the same, there are some hidden benefits to giving up the car yourself.

Voluntary repossession is exactly what it sounds like: you give up your car to the dealer or lender. Choosing to give up your car won’t get you out of the damage caused by repossession, such as a drop in credit score, but it can take some of the stress out of the process. Voluntarily giving up the vehicle shows the lender you’re willing to work with them in a positive manner. Also, it could result in fewer repossession fees, as the lender won't have to spend money to get the car back themselves. But the biggest benefit to voluntary repo is avoiding the "cost" of having a repo man take your car for you.

If you don’t take the vehicle in yourself, an involuntary repossession occurs. This means that the repo man will show up at any given time or place to seize the vehicle without warning. If you choose not to turn in the car yourself, be aware that you could wake up to your car gone – and that, itself, can cause a lot of stress.

A Better Plan

You want to take every available action as soon as you realize making your car payment is becoming a hassle. Don't wait until the point comes where it's too late to do anything and a repossession – be it voluntary or involuntary – is inevitable.

The number one thing you need to do is contact the lender as soon as possible. Explain your situation and maybe the two of you can work out a revised payment plan. Ask about a possible payment extension or if you can refinance the loan to extend the term and lower your payments. If getting caught up on payments isn't possible, you may also want to investigate your equity situation. If you have equity in your car, selling it or trading it in are two options worth exploring. Having your vehicle repossessed should be a last resort option.

The Bottom Line

Auto Credit Express helps people facing credit issues, such as a prior repossession, find auto financing. We work with a nationwide network of dealers who have lenders available to work with people in various stages of bad credit. Get started today by filling out our free auto loan request form.