What happens after paying off a car loan?

I just took out a car loan and bought my first car a few weeks ago, so I still have a few years of payments left. I’m curious: what happens after paying off a car loan?

Congratulations; getting your first car is a significant milestone, and you must be excited!
After paying off a car loan, you will gain full ownership of the vehicle, meaning the lienholder can be removed from the title.
Once the loan has been repaid, you should:
  • Get your title back from the lender. In many states, the lender holds the title and will take care of the paperwork to remove themselves as the lienholder before mailing you the free and clear title. However, if you live in a non-title-holding state and have possession of the title, you’ll need to visit the DMV to remove the lienholder.
  • Let your car insurance company know that you no longer have a lien on the title.
Additionally, now that you own the vehicle outright, you’ll no longer have to carry comprehensive and collision coverage, although it may be worth keeping.
Whether you decide to keep the comprehensive and collision coverage or not, you should take the opportunity to shop around and compare quotes from multiple insurers to ensure you’re getting the best rate.
If you’d rather leave the hard work of gathering quotes to someone else, use Jerry. The Jerry app can collect quotes from more than 50 top insurance companies, like Travelers, Nationwide, and Progressive, in seconds! They even help cancel your old policy once you’ve made your pick.
Jack Walsh
Answered on Dec 01, 2021
Jack is an insurance specialist and writer living in Buffalo, New York. He has a BA from Union College and worked as an insurance agent with Jerry before joining our content team. He enjoys using data and research to break down complex subjects and convey a story. In his spare time, Jack enjoys cycling, cooking, and exploring Buffalo’s beautiful waterfront.

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