How do I return a car I can't afford? (2023)

Can you return a car on finance if you can't afford it?

Cancelling your car finance early through voluntary termination is a solution if you cannot afford your car finance payments. You can contact your provider to say you want to end your agreement and return the car, without facing any further charges.

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What happens if a car on finance breaks down?

Before the scrapyard can take legal possession of the broken down car, you need to secure ownership of the car finance institution first. This means you have to pay your obligation completely before you can sell the car for parts.

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What happens if you let a financed car go back?

The lender will resell the vehicle, and the proceeds will go toward the balance you still owe on the loan. If there is still a balance remaining after the sale and you don't pay it, it could be turned over to a collection agency. This may result in a collection account being added to your credit history.

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What happens if you hand a finance car back?

If you decide to return the car, tell the finance company by letter or email and keep a copy. Make very clear you're returning the car and ending the agreement. If you don't do this you could be seen to be defaulting on your payments, which could affect your credit rating.

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How do I get rid of a car with outstanding finance?

To do this, you'll need to contact your finance company and ask them for a settlement figure. Once you receive your settlement figure, you'll have a set period of time to pay it off. Once you've paid it all off, the cars will be yours to sell.

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How do you escape a car on finance?

  1. Speak to the finance company.
  2. Pay the settlement figure and sell the car.
  3. Part-exchange the car for a cheaper new one.
  4. Use Voluntary Termination (VT) to end the agreement.
  5. Use Voluntary Surrender to return the car.
  6. Speak to the finance company.
  7. Pay the settlement figure and sell the car.

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Can I swap my car on finance?

Car finance has many moving parts, and loans are tailored to your individual circumstances and your financed vehicle. This means swapping finance from one car to another isn't possible, nor can you take your current car off the finance arrangement and replace it with another.

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Will returning a car ruin your credit?

When you return a car you can't afford to the lender, it's called voluntary repossession. It still hurts your credit.

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Does giving back a financed car hurt your credit?

Voluntarily surrendering your vehicle will have a substantially negative impact on your credit scores because it means that you did not fulfill the original loan agreement. When you voluntarily surrender your vehicle, the lender will sell the car to recover as much of the money owed as possible.

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Is voluntary repossession a good idea?

When you can no longer afford your car payments, voluntary repossession may seem like the best way to get your car loan off your hands. But returning your car to your lender could have serious financial consequences, including your account going into collections and your credit taking a hit.

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Can I trade in a financed car for a cheaper car?

Yes, it's possible to trade in a financed car for a cheaper one, but it really all depends on your situation. Consumers trade in cars that they still owe money on all the time. In fact, very few people actually wait until their vehicles are paid off before purchasing their next one.

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Can I change my mind after buying a car on finance?

You can end your existing agreement by paying the settlement figure. You can usually find your settlement figure on your finance agreement or you can contact the lender directly to find out how much it'll cost to settle your loan in full.

How do I return a car I can't afford? (2023)
Does voluntary repossession hurt your credit?

The simple answer is yes, a voluntary repossession affects your credit score. Even if a borrower does give up their vehicle voluntarily, their credit score still takes a hit.

Does voluntary termination affect my credit score?

One of the myths about voluntary termination is that it is detrimental to your credit rating or credit score. This is not true. You are simply exercising your legal right to terminate your agreement. Your credit rating will not be affected.

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