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What happens when I pay off my car?

I’ve nearly paid off my car and I’m super excited, but I’m not sure what to do next. What happens after I make my last car payment?

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Jason Tushinski · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
First off, we here at Jerry offer you a hearty congratulations for paying off your car—this is a big deal, so good on you! What happens when you pay off your car? Well, that’s up to you! Typically, once you pay off your car, you’ll need to get the title, re-think your finances, notify your insurers, and go over your insurance options.
  • Get your title: When you take out a loan to buy a car, the lienholder or lender’s name is on the car’s title, not yours. But once you pay off the loan, this changes—your name goes on the title. Usually, a lender will notify the DMV in your state about this change, and your DMV will process the paperwork and mail a new title to you. If you want to sell your car or use it as collateral when applying for credit, you’ll need the title!
  • Your finances: With your loan paid off and your pockets bulging with cash, your first instinct might be to buy yourself something frilly. Make no mistake—we here at Jerry love frilly stuff. But spending your cash that way isn’t smart—instead, save that money! You’ll be glad you did if you have to deal with any unexpected car repairs, or if you want to put it towards a new car down the road.
  • Notify your insurer: Once you’ve paid your loan off, notify your insurer to remove the lienholder’s name from your policy. That way, in case your car is totaled in an accident, any settlement will be mailed to you, and not the lender.
  • Review your insurance options: Most lenders require loan holders to carry full coverage, which usually consists of collision, comprehensive, and other coverage. Now that you’ve paid off your loan, you don’t need to carry this extra coverage if you don’t want it—make no mistake though, full coverage is almost always recommended, unless the cost of full coverage outweighs the vehicle’s value.
As mentioned, full coverage is almost always recommended. The best way to get a robust
car insurance
policy is by using
Jerry
—you’ll get a great policy at an affordable price!
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.

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