How to hand a car back to a finance company

Updated November 22, 2016

Handing your car back to your finance company, a process known as repossession, can be a difficult decision. Explore all other options before you give your vehicle back, as repossession will hurt your credit for years to come. In addition, the financing institution has the right to, and often will, sue you for any remaining money due if the vehicle has negative equity when the bank resells it.

Call the bank that financed your vehicle. Tell the representative that you will not be able to make payments and want to have the vehicle repossessed. The bank may offer to pick up your vehicle, which is a straight repossession, or tell you where you can drop it off, known as a voluntary repossession.

Take all of your belongings out of your vehicle. Be sure to check under the seats, in the seat backs and in the boot. Any aftermarket items may be removed if you are returning the vehicle yourself, although if your vehicle is picked up by a repossession company, you may not have the option to start taking parts or accessories out of the car.

Create a simple letter or document to be signed when you drop off your vehicle or when it is picked up. To protect yourself against unreasonable resale charges, note the mileage and overall condition of the car, along with the number of keys, key fobs and any other items you are leaving with the vehicle. The bank will sell your vehicle, and you will be responsible for any money owed on the loan beyond what the car is sold for.

Take your vehicle to the dealership you bought it from, to the finance institution or to a location your bank has indicated, unless you plan to have it picked up. Do this during business hours, while someone is there to take your keys. Do not drop off your car without speaking to someone to verify that keys have been handed over. Make sure your document is signed.

Examine the letter you receive from the finance institution stating the price your vehicle was sold for. The bank may owe you money if your car was sold for more than you owe. If you owe more than the car is sold for, you will receive a letter from the bank stating what you owe. The bank has legal rights to collect this amount. You may be able to work out a payment plan in this situation.


To avoid embarrassment, you may want to arrange for your vehicle to be taken to a designated location rather than having it picked up. The repossession company can pick your car up wherever it wants to, including at your job, your home or even a store while you are inside shopping.

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About the Author

Shanan Miller covers automotive and insurance topics for various websites, blogs and dealerships. She has extensive automotive experience, including auction, insurance, finance, service and management positions. Miller has worked for dealer sales events around the United States and now stays local as a sales and leasing consultant for a dealership.