Wondering how to let a car go back without ruining credit? Well, there are a few strategies that car owners can use to avoid damage to their credit history. We have outlined them below for you.

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How to Let a Car Go Back Without Ruining Credit

Anytime a financed car is returned, it can impact the credit score. To avoid this, you can take the following steps.

1. Lenders Can Help

Lenders may be able to guide car owners on some alternatives, such as voluntary repossession or reduced payments. This can help you return the car without damaging your credit score.

2. Voluntary Repossession Agreement

For the repossession to occur seamlessly, you have to ensure that you receive clear terms on how the remaining car loan balance will be handled after the car is sold off.

3. Deficiency Payments

Any leftover deficiency payments after the car is sold should be taken care of. You can ask for a settlement agreement for less than the amount you own. Leaving the debt unfinished can likely impact the credit score.

4. Reporting Verification

Do make sure to check whether the lender has accurately reported the repossession of the car to credit score agencies. Any mistakes in the report can damage the credit score.

5. Building Positive Credit

Even if the credit score takes an initial hit, you can always rebuild it by keeping up with payments and maintaining a low balance.

Alternatives to Returning Financed Cars to Dealers

If you find that you are unable to return a car back to the dealer, you can also explore some alternative options that can help you out.

Hardship Assistance Options

Car owners can get in touch with the lender about alternatives to hardship assistance. It can be better if you have experienced any financial problems, such as unemployment. However, some lenders do not offer these options. Plus, you will still owe the same amount of money, but the terms of the loan might change.

Refinancing Car Loans

Refinancing ensures that you can keep the car and protect your credit scores. However, you will have to pay the upfront cost for it, and you will still have to make payments for the amount you owe. But you can pay it off based on a longer timeline.

Trading the Car

You can trade your car for another that you like, which can reduce the amount you have to pay to the lender. Car depreciation may decrease the value of the car below the amount you have to pay. Depending on the car you pick, you may also owe some extra cash, so make sure to make a wise choice!

Sell the Car

You can sell the car and pay off the loan without going back to the dealership. Since the car might have depreciated, you might still have to pay off some money for the car loan. Plus, you will no longer have the car.

Acceptable Reasons to Return the Car

Realistically, you are obligated to keep any car when you have signed the contract. However, there are some situations where car owners can return the car without credit score damage.


In cases where a car has a huge factory defect, car owners are allowed to return it, depending on the “lemon law” of the state. They can differ depending on where you reside, but in cases where a major mechanical problem is covered by the warranty, you can return it.

However, the issue should be discovered within a specific time period, and dealers should be given a reasonable time to repair the car before it qualifies as a lemon car.

When the car you bought is declared a lemon, you may usually request a refund for the cost or trade it in for a new vehicle. In addition to the car's purchase price, you will usually be compensated for sales tax, registration fees, towing costs, any associated legal expenses, and the cost of renting a substitute vehicle.

Return Policies

Certain car sellers let you return cars within a predetermined window of time after you buy them. For instance, the five- to ten-day restricted return policies offered by online auto vendors AutoNation, CarMax, and Carvana are applicable to both new and used automobiles. You may return up to two cars with Carvana and get new ones in exchange.

Return policies usually come with limitations. For example, a vehicle may not be accepted back if it has been harmed or driven beyond a certain distance.

Used or verified pre-owned vehicles may be returned or exchanged at physical auto dealerships, but new vehicles are typically not accepted. Laws governing used car returns exist in several states. For example, for any used car under $40,000, dealers are required by California law to provide the customer the opportunity to purchase a contract cancelation agreement. The agreement costs $75 to $400, depending on the car's MSRP, and is based on that amount.

Financing Issues

If you finance your vehicle through the dealership, you may be eligible for spot delivery or conditional financing. You may drive the car out of the dealership before the loan is formally authorized since the lender is certain they can obtain you a loan.

But if the loan has issues after you leave, the dealer can insist on a larger down payment or pressure you to take out a longer-term or higher-interest loan. Thankfully, you are under no obligation to accept the revised loan conditions. It is legally your right to return the vehicle and have your down payment reimbursed.

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Unacceptable Reasons for Returning the Car

Now that you have learned how to let a car go back without ruining credit, there are still some cases where you will not be able to do so.

The dealership has a lot of work to do when a car is returned. They could have to return the title to the car, refund debts, and forfeit the salesperson's commission. Generally, you cannot return a car for any of the following reasons unless the auto dealer is prepared to make an exception for you.

Regretting the Car Choice

Purchasing a car may be a stressful process, and it's simple to allow your feelings to get the better of you. Salespeople could take their time negotiating in an attempt to tire you out. Exhibiting new vehicles in a showroom may entice you to make poor choices. Perhaps you had your sights set on a conventional family SUV, but you bought a small red convertible on a whim instead. For some reason, dealerships usually won't accept buyer regret as an acceptable reason for a car return.

Loans Are Too Expensive

You purchase a car, but your income suddenly reduces due to a job loss, divorce, or other life upheaval, making the auto payments impossible. Or perhaps you discover you can't afford the payments after reading the loan details again. Expensive extras and extended warranties can easily cause the purchase price of a vehicle to exceed your initial budget, even if they may seem like a smart idea at the time.

Generally speaking, you cannot return a new automobile merely because you feel the price is too high. However, under some circumstances, you might be able to return your money and cancel the warranty or other extras.


These strategies on how to let a car go back without ruining credit can definitely help! Make sure to get in touch with the lender to check how you can do so.