Due to adverse personal circumstances, it will no longer be possible to continue to pay for a vehicle I purchased about a year and half ago. The lender does allow voluntary repo (meaning I return the collateral to them voluntarily) as opposed to using a repo service to take the vehicle by force. Though I realize there's likely no financial advantage to voluntary repo, morally it seems like a better option. Should I proceed with returning the collateral as a voluntary surrender or just allow the lender to proceed with repo action in the standard way when the time comes? I'm not in default yet, but will be soon so I need to make a call on this rather quickly.
Are you upside down on your car loan? I assume you've considered the option of trying to quickly sell the vehicle instead? It's best to do everything possible to avoid a repo.
If you are underwater on your loan, can't scrounge up cash anywhere to make up the difference, and are therefore unable to sell, then I would still not just allow the repo to happen in the standard way. Work with the bank as much as possible and return it to them in the cleanest way in order to keep their costs of repo down. You're likely going to get hit with a fat judgment down the road and you want that number to be as small as possible.
I'm curious what you decided to do Panate. Have you been trying to quickly sell, or did you decide to just take the voluntary repo route?
I'm with you on this one and seriously, except for legal reasons I can't understand how any lender wouldn't agree to a voluntary repo as to opposed to using repo services. Joshua is correct, the costs involved with a repo service can be expensive for the lender and there is always the chance of the tow company damaging the car. There are legal fees, towing fees, auction fees or/advertising fees to sell, plus title fees as well as insurance. I agree too that if possible you should try and work it out with the lender. Once repossessed, there are just too many costs involved to get your car back even with the same retail contract. Hope everything works out for you.
I sincerely apologize for the tardiness of expressing my thanks to those who have contributed to this thread, but my personal situation has deteriorated significantly since this post was originally written and I've been unable to return until now. I still have custody of the applicable collateral but I've moved towards a position of less concern about ideals and what overall effect this action may have in consideration of expediency. My circumstances presently don't permit my direct communication with the lender to discuss the situation without risking absorbing a significant risk of exacerbating the continually worsening problem at the root of the issue. In the interest of minimizing contact and/or confrontation, I've settled on very likely leaving the collateral on lender property in conjunction with an explanatory letter describing the details of the circumstances after which they can proceed as they deem appropriate. These same circumstances will also summarily complicate their efforts to collect any balance applicable to my account after the collateral is surrendered, so I very certainly hope that my efforts to ease their repossession process may yield value to offset whatever losses they may otherwise incur. Unfortunately time has lapsed to provide much additional consideration beyond what I've previously mentioned to this particular creditor, as I expect to run out of cash by the end of the week in all accounts, causing cascading defaults by next week through my revolving lines paid by ETF which will raise alarms with the lender and potentially trigger an adverse reaction. Thank you all once again for your contributions. I'm not sure what else I can add to this thread, but perhaps there may be some opportunity where my own experiences could serve as a relevant basis on which to render some assistance to the community at large for as long as it's possible for me to do so.
I'm sorry to hear about the tough situation you're in at the moment. Thanks for taking the time to get back to us, and I wish there was more we could do to help. It certainly sounds like you're trying to make the best decision based upon your circumstances, so I wish you the best! Hope to see you around the forum at some point in the future.
