Is a voluntary repossession better than an involuntary one in terms of the credit impact?
Voluntary repos are reported as such to the credit bureaus, but the way it is interpreted varies between banks. Some will see it as a sign that the consumer took the initiative in resolving the debt problem, while others treat it exactly the same as if the repossession was forced. What is my incentive to voluntarily return the car then? One advantage is the creditor may not tack repossession fees in the event the vehicle was returned voluntarily. That being said, even then some banks will still tack on the fees for “storage” and other repo costs. Another advantage is that in some states you can reinstate the contract, which allows you to keep the property by making up any late payments plus repossession fees. That being said, if you hide the car or make it more difficult to repossess, then the lender is reserved the legal right to reject the reinstatement. Can the creditor refuse to accept a voluntary repo? Yes. This is most often the case when the property being turned in has deprecia
