Defined
What Is Voluntary Surrender?
Voluntary surrender is when you hand your financed car back to the lender because you can't keep up the payments. Unlike voluntary termination, it can leave you owing the remaining balance.
Voluntary surrender is a last resort if you can no longer afford your car finance. You give the car back, the lender sells it, and you may still owe the shortfall between the sale price and your balance. It's different from the statutory voluntary termination right.
How voluntary surrender works
You return the car voluntarily, the lender sells it, and you're charged for any gap between the sale price and what you owed, plus fees. It's recorded on your credit file.
This is the key difference from voluntary termination: voluntary termination is a legal right under the Consumer Credit Act 1974 once you've paid 50% of the total, and caps what you owe. Voluntary surrender has no such cap, so explore settling, selling or termination first.
When to consider it
Voluntary surrender is usually a last option, once settling, selling the car or voluntary termination aren't possible. It protects you from repossession but harms your credit.
Watch out
Frequently asked
What is voluntary surrender of a car on finance?
What's the difference between voluntary surrender and voluntary termination?
Does voluntary surrender affect your credit?
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