To get out of an 84-month car loan, options include refinancing to a shorter term, selling the vehicle to pay off the balance, making extra principal payments, or trading it in. Refinancing is best if your credit has improved, while selling or trading in works if you are not "underwater" (owing more than the car is worth).
To legally get rid of a car loan, you can sell the car and pay off the loan, trade it in, refinance for better terms, ask your lender for loan modification/forbearance, explore a loan assumption, or in extreme cases, perform a voluntary repossession/surrender, though this hurts credit; bankruptcy is another legal path for significant financial distress. The best legal option depends on your financial situation, equity in the car, and credit, with selling or refinancing generally being the best choices to avoid major credit damage.
It is generally best to avoid 84-month loans, but they might be helpful in certain situations. An 84-month auto loan generally has lower monthly payments but higher total borrowing costs. Before you take out an 84-month car loan, explore all of your options, including waiting until you can afford a higher down payment.
Yes, you can cancel car finance and return a financed car, often through a "voluntary repossession" (surrendering it) or voluntary termination (for PCP/HP if 50% paid), but it usually has significant credit score damage and you're still liable for the loan balance (a "deficiency balance") after the lender sells the car. It's a last resort after trying other options like refinancing or trading in.
If you need to get out of a car loan you can't afford, options to consider include negotiating with your lender, refinancing your loan, selling the car or voluntarily surrendering it to avoid repossession. For many people, a car provides necessary transportation for work, school or other everyday needs.
There are generally no universal government-backed car loan forgiveness programs, but lenders often provide hardship programs (deferments, payment reductions, or extensions) for borrowers facing temporary financial crises like job loss, and some dealerships offer unique assistance; you must contact your lender directly to explore options like payment pauses, refinancing, or selling the car to avoid default.
Financial Alternatives to Returning Your Car
If you want to return your car because the payments are too high, you could try to refinance your car loan. Refinancing may help you keep your car under more manageable loan terms. As a last resort, you could also opt for voluntary repossession if you have no other choice.
Once you've paid off at least 50% of the total amount payable under your car finance agreement, you could exercise your right to voluntary termination. You'll need to return the car in good condition and notify your finance provider that you wish to terminate the agreement.
To return a car you can't afford, communicate with your lender to arrange a voluntary surrender, which is better for your credit than involuntary repossession but still hurts it and leaves you responsible for the "deficiency balance" (what you still owe after the car sells). Other options include selling it privately or trading it in, potentially at a loss, or using a dealer's buyback program, but always expect to pay the difference if the sale price is less than the loan balance.
For a $70,000 vehicle, assuming a $10,000 down payment, 5% interest, and 72 months, your payment would be approximately $967 per month.
Paying off a loan early: five ways to reach your goal
Quick Answer. You can return your car to the lender before you finish paying off your loan. Called a voluntary repossession or surrender, this is better than vehicle repossession, but can still seriously damage your credit scores. You're having trouble making your car payments and want to get out of your auto loan.
Yes, voluntarily turning in your car (voluntary surrender) is generally better than having it involuntarily repossessed, as it gives you control, avoids extra fees, and may be viewed slightly better by future lenders, but both options severely damage your credit and can leave you owing a deficiency balance (the difference between what you owe and the car's sale price). It's a "best worst option" that allows for a cooperative exit, but exploring refinancing or selling the car first are often better financial moves, says Experian.
Dave Ramsey's core car rules emphasize paying cash, avoiding new cars (unless you're a millionaire), keeping your total vehicle value under half your annual income, and using a strict budget, often suggesting the 20/4/10 rule (20% down, 4-year loan, 10% total car expenses) as a guideline if financing, but preferring no debt at all to avoid depreciating assets trapping you. He stresses buying reliable, used vehicles to prevent debt and build wealth.
A voluntary surrender is considered a negative mark on your credit profile because it indicates that you've failed to meet your obligation to repay your auto loan. As a result, it can lower your credit score.
The fee is typically calculated based on the remaining term of the agreement and the expected volume of invoices that would have been factored during that period. The specific calculation method can vary and may be a flat fee, a percentage of the remaining value of the agreement, or a combination of both.
You could get out of your current car loan by refinancing, selling your car or by giving it back to your lender as a voluntary repossession. Voluntarily repossessions negatively impact your credit score for up to seven years. Refinancing or selling it might be your best options.
Many lenders offer auto loan hardship programs to help borrowers manage their monthly payments while dealing with a financial emergency. Options include smaller monthly payments, a reduced interest rate, payment deferment and payment extension plans. Each lender has its own requirements.