What to Know About Voluntary Car Repossession in Florida

You might be wondering, what exactly is voluntary car repossession? Well, when you take out a loan to purchase any property, the lender has the right to take that property back if you don’t meet the terms of the loan. This is known as repossession.

Voluntary Car Repossession Laws in Florida

But in Florida, you can choose to voluntarily give the property back to the lender before they are forced to repossess the property. This process is called voluntary repossession. And voluntary car repossession is possible in Florida. 

When you buy a car on credit, your creditor has the rights to your car until you have made your final payment. If you fail to make timely payments, your creditor has the right to repossess your vehicle without going to court or even warning you beforehand.

Fortunately, Florida state law does place some limits on how the credit is allowed to repossess the vehicle or resell it to eliminate the debt. It’s important to take bankruptcy into consideration, as filing for bankruptcy could affect the car’s repossession and you should talk to an attorney. If you are unable to make your car payments, you can consider a few different options.

Talking to a creditor

It’s very hard to dispute repossession once it has already happened, so if you realize that your car payment will be late, contact your creditor right away. Some creditors will agree to a delay if they have confidence that you will make your payment on a later date. You can also ask if you can have the missing payment applied to the end of your loan.

Figure out what default means

It’s important to know what your contract defines as defaulting on your loan. For example, some contracts define defaulting as failing to make a payment on time. But if your creditor has agreed to accept a late payment, the terms of your original contract are moot. Make sure that if you and your creditor discuss changing the terms of your original contract, it is in writing and signed by both you and the creditor. Oral agreements are very difficult and almost impossible to prove and they usually cannot be used as evidence in court.

Voluntary car repossession

Voluntary car repossession is definitely something to consider if you live in Florida. Voluntary car repossession means that you can voluntarily return your car to the creditor, thereby reducing your creditor’s expenses in repossessing the car and reducing the amount of money that you owe to the creditor. Keep in mind that voluntarily returning your car to the creditor does not mean that you are free from your financial obligations to the creditor. You are responsible for paying any deficiencies or back payments you owe on the loan. Also, your creditor can enter repossession on your credit report, even if it is voluntary.

When returning your car, make sure to inform your lender that you will not be making any more payments moving forward and make it clear that you want to surrender your vehicle. Then set a time and place to bring the car to the creditor and turn over the keys. This process is voluntary, because you are the one to request and arrange everything, rather than your creditor.

Voluntary car repossession might be your best option if you live in Florida. It’s important to consider the pros and cons:

• Easier experience. When you choose to voluntarily repossess your car, you are the one in control. In a standard repossession, your creditor will send a repossession agent, also known as a repo man, to collect your car, and you might not even know it is happening. The repossession agent will retrieve your car from wherever it is parked, whether it is at home, your work or at the store. Repossession agents will often follow you or even use a GPS to locate your vehicle. This can be a super chaotic or inconvenient situation. For example, they might leave you stranded far from home, which can be disastrous if you need to get to work for a presentation or pick up your children from school.
• Cost. Traditional repossession can be very pricey. Luckily, with voluntary car repossession, you are in control of informing your lender that you will not be making any more payments moving forward and making all of the arrangements to turn over the car and the keys. The costs are typically much lower than standard repossession, because you don’t need to pay your creditor back for their repossession costs.
• Credit history. Another huge thing to consider is how repossession will affect your credit score and credit history. Even voluntary repossession will do some damage to your credit. A voluntary repossession is just as much of a defaulted loan as a standard repossession. But voluntarily surrendering your car will almost certainly harm your credit less than standard repossession. A voluntary repossession shows up differently on your credit reports, and that will likely matter to loan officers reading through your report manually.

So there you have it! Voluntary car repossession certainly is not for everyone, but it’s important to consider the facts, benefits and downsides before making your decision. You might find that it is the best choice for you and your situation.

If you’re considering voluntary car repossession in Florida and want more information, feel free to check out Van Horn Law Group’s website here.