Dumping car on lender will trash credit

Dear Terry,
I have a question about voluntary repossession. I got ripped off over a 2002 Chevrolet Tahoe. Now that I want to trade this car for something smaller, the car dealers won't give me anything because of the high payments.

I have good credit. So, I was thinking about voluntarily repossessing this car and buying another one. Please give me advice. Am I stuck with this Tahoe for a couple more years?
-- Nicole

Dear Nicole,
You may have good credit now, but you won't if you simply dump this vehicle back on the lender. A voluntary repossession is as bad on your credit as having the repo guy snatch the vehicle in the middle of the night.

Hang onto the Tahoe a few more years until the loan balance is less than what it's worth. Then, get a new car.

Here are this week's reader questions:

• Trading in gas guzzler may cost you • Should I take out a loan for my fiance? • Can a lender pursue payment after a repo? • Will a "voluntary repo" trash my credit?

If you have a question for Terry, e-mail him at Driving for Dollars. Save money on your car -- sign up for Bankrate's new weekend Car & Money newsletter.