What does voluntary surrender mean?
In the context of car finance, voluntary surrender means the borrower returns the car to the lender without paying off the outstanding balance. The lender then will sell the car (usually at auction) and then use that money to pay the outstanding amount on the finance agreement. The borrower is then liable to pay any outstanding balance which wasn’t covered by the sale.
The borrower may enter a voluntary surrender if they are unable to make the monthly payments.
Voluntary surrender is different to voluntary termination as you are not required to pay 50% of the balance before handing the car back.
