I currently own a 2017 Toyota with about $20,000 left to pay. I purchased it from a buy here pay here dealership last year, and at that time, I had no credit history. Now, managing the $618 monthly payment is challenging for me, and I’m considering a voluntary surrender of the vehicle. However, I’m concerned about how this could impact my credit score if they report it as a repossession.
What I’m trying to understand is this: since the dealer hasn’t reported any of my payments to the credit bureaus over the past year, do they have the right to report my voluntary return as a repossession?
If anyone has experience with this, please share your insights. I could really use some guidance on what to expect.
Yeah, this is super common with BHPH dealers. They’re picky about credit reporting - only do it when it helps them, not you. Even after a year of payments with zero reporting, they can absolutely still report a repo.
BHPH dealers have gotten way more aggressive lately with collections and credit stuff. Higher interest rates made their funding expensive, so they’re squeezing every dollar they can. 
Before you surrender, ask if they’ll do a deed in lieu instead of a regular voluntary repo. Some dealers will take this to skip the repo paperwork and auction hassles. Still hurts your credit, but the reporting might be slightly better.
Don’t forget - you could still owe money after they auction the car. A 2017 Toyota should have decent resale value, but BHPH dealers usually use their own auctions where cars sell way below market.
Yeah, they can report the repo even if they never reported your payments. Screwed up but that’s reality. Payment reporting and negative reporting are totally separate - BHPH dealers love reporting bad stuff but couldn’t care less about the good stuff.
Call them before you surrender though. See if they’ll work something out. These places often prefer a smaller payment over dealing with repo and resale hassles. Ask about lowering payments or setting up a plan.
If you’re getting a repo hit either way, voluntary surrender looks slightly better than forced repo. Still tanks your credit but does less damage. Get everything in writing if you go this route.
Yes, they absolutely can report it. BHPH dealers often choose not to report your timely payments, but as soon as there’s an issue like a surrender or missed payment, they won’t hesitate to file a repossession.
Keep in mind, once they repo and auction that Toyota, you’re likely still liable for the remaining balance. The auction price is typically much lower than market value, so be prepared for that extra financial hit. BHPH dealers tend to use low-end auction houses, further diminishing the value.
Before you proceed with the surrender, try negotiating with them. Often, they might accept a lump sum that’s significantly less than what you owe to avoid the hassle of repossession. It’s common for them to settle for 60-70% of the balance to keep things streamlined. Just ensure that any agreement you reach is documented clearly as “paid in full.”
If negotiation doesn’t pan out, remember that a voluntary surrender looks better than a forced repo on your credit report, but both will damage your score.