Voluntary relinquishment and repossession are loan defaults, which remain on your credit reports for seven years. That type of negative rating will hurt your scores, especially your car-specific credit scores. The next time you apply for an auto loan, you'll likely be considered high-risk and will charge you high interest. While voluntary recovery won't have as negative an impact on your credit as involuntary recovery, it will appear on your credit history as a negative mark and will affect your score.
In addition, if you didn't make payments for the car before the voluntary recovery, that will also affect your rating and credit history. Lenders have the right to regain possession of your car if you don't make payments or get car insurance, so handing over your vehicle could be your best option to mitigate the damage to your finances and credit. Financing a car may be a cheaper option than buying a car outright, but auto loan payments can still add up to the point where they're difficult to maintain. Loan payments, along with expensive car insurance, often make it difficult to finance a car on a limited budget.
Yes, returning a financed car will have a negative impact on your credit rating, especially if you decide to have your car voluntarily repossessed.
