What happens to a car loan when you die?

My best friend’s mother passed away a few days ago. He said his mother had just gotten a new car last year and he has no idea what needs to be done. Since he’s the only living relative, I want to help him out. What happens to a car loan when you die?

I’m sorry to hear about the loss. I’m sure your friend appreciates the help.
Car loans can certainly be a bit confusing, and unlike other debts, a car loan isn’t forgiven when you die. After the owner passes, it will have to be paid off or taken over by a relative.
In this case, it sounds like your friend is the executor of his mother’s estate or will. He can settle the debt by:
  • Taking over the loan payments
  • Letingt the lender repossess the vehicle
  • Using funds from the estate to pay off the loan
  • Selling the vehicle to pay off the loan
While none of these situations are ideal, it’s best if your friend contacts his mother’s lender to determine what options are available. Additionally, you can help him out further by suggesting he cancel his mother’s current car insurance and use Jerry to find a new policy for the vehicle.
Jerry is an insurance comparison app that shops for low prices with over 50 different insurance companies for free and does all the hard work of purchasing a policy for you. Once you make a selection, you won’t have to make any phone calls or deal with the paperwork, and if you ever have any questions, their friendly agents are just a text away!
Jack Walsh
Answered on Dec 08, 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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