Voluntary termination (VT) in finance, particularly for car loans or hire purchase, limits a borrower's liability to 50% of the total amount payable, provided all payments are up to date and the vehicle is returned in good condition. It allows the debtor to terminate the agreement early, but they may be liable for damage exceeding normal wear and tear.
If you exercise voluntary termination, you may need to pay any outstanding balance up to the 50% threshold of the total amount payable under the agreement. Other fees, such as vehicle damage beyond normal wear and tear, may also apply.
If you quit voluntarily, you are not entitled to severance. It is your choice not to continue to draw pay by working for the company.
Contrary to popular belief, opting for voluntary termination doesn't automatically damage your credit score. If you have met the necessary payment requirements, typically paying at least 50% of the total amount payable, and have no outstanding arrears, your credit score should remain unaffected.
Is voluntary termination the same as quitting? Yes, voluntary termination and quitting are essentially the same. Both refer to an employee choosing to leave their job rather than being fired or laid off by their employer.
No, in most U.S. states, you are not legally required to give four weeks' notice (or even two) because of "at-will" employment, meaning you or your employer can end the relationship anytime; however, an employment contract or collective bargaining agreement might legally mandate a longer notice period, and failing to give notice can damage professional relationships or affect references, with penalties like forfeiting paid time off possible if a contract is breached.
Having the right to voluntary termination can offer peace of mind if your circumstances change while you're in the middle of a finance agreement, or if your car no longer fits into your lifestyle. Voluntary termination applies to both Hire Purchase (HP) and Personal Contract Purchase (PCP) car finance.
Yes, a voluntary repossession (or surrender) is generally considered better than an involuntary one because it's less stressful, can save you money on fees (like towing/storage), and shows lenders you're trying to be responsible, though both still severely damage your credit and leave you owing a potential deficiency balance. The key is proactive communication with your lender to arrange the return on your terms, rather than waiting for a forced, confrontational seizure, which leads to higher costs and more stress.
Reasons for Voluntary Termination (Employee Resignation)
Voluntary Termination
Employees that have voluntarily left the company can be strong candidates for rehire, depending on what their status looked like when they left the job.
By voluntarily choosing to liquidate the company, you can avoid being petitioned through the courts and be able to demonstrate to the public that liquidation was a company choice rather than a result of hostile creditor action.
A voluntary surrender will typically remain on your credit report for seven years from the original delinquency date.
1. Severe Credit Damage. A voluntary repo still shows as a repossession on your credit report for seven years. Your score can drop 100–150 points or more.
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.
This process will have a serious impact on your credit report—voluntary surrender is typically reported similarly to a repossession and can remain on your credit reports for up to seven years from the first missed payment that led to the derogatory status.
To politely resign immediately, inform your manager in person if possible, state your resignation clearly and professionally (e.g., "due to unforeseen personal circumstances"), offer brief thanks and regret for inconvenience, provide a formal, concise letter stating the immediate effect, and offer minimal help for a smooth handover to maintain goodwill. Keep it brief, positive, and focus on your decision to leave rather than negative reasons.
You also need to consider that even if you do resign, your employer could continue the disciplinary process during your notice period, and ultimately still dismiss you for gross misconduct. This would supersede your resignation, with the effect that the balance of your notice period is cut short.
This notice period will apply as long as it meets the minimum requirement in any applicable modern Award or Enterprise Agreement. This is typically between one and four weeks', depending on how long you have been employed, but can be longer for senior employees or those in management positions.