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What happens with a car loan when the owner dies?
What happens to a car loan when the owner dies? I got a new car using a car loan, and while lying in bed counting sheep, my mind began to wander. I wondered what would happen if I died and still had a car loan.
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Congratulations, getting a new car is an exciting experience, but there is certainly a lot to contemplate!
When it comes to
car loans
and death, the loan is not automatically forgiven like some other types of debt. Typically, to settle the debt, people will: - Use funds from their estate to pay off the loan before having it sold or given away as an inheritance
- Have a relative take over the loan and continue making payments
- Allow the lender to repossess the vehicle
If you know what you want to be done with your vehicle and loan when you die, you should outline it in your will or estate plan. However, if you are more indifferent about what is done with your loan and vehicle, you can leave the decision to the executor of your will and estate.
To learn more about what happens to your loan when you die, you should also read through the death clause in your loan agreement.
Finally, if you are ever concerned about your loan, consider refinancing. On average, car owners pay $85 less every month by refinancing their auto loan. Consider downloading the
Jerry
to see if refinancing your car loan can save you hundreds of dollars per month.View full answer
- Gregory R.
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