Fintopi
    Facebook Twitter Instagram
    Fintopi
    • Home
    • Loans
    • Trading Brokers
    • Contact us
    Fintopi
    Home » What Will Happen to a Car Loan When Someone Dies?
    What Happens to a Car Loan If a Car Owner Dies?
    Auto Loans
    FinTopiAuthorBy FinTopiAuthorOctober 12, 2022Updated:June 14, 2023No Comments7 Mins Read

    What Will Happen to a Car Loan When Someone Dies?

    When you get a car loan, you are legally responsible for making the payments on that loan. Many people chose this option as a way to get to their dream vehicle as soon as possible. But what happens if something goes wrong and you can’t make the payments anymore?  

    In this article, we’ll explore what exactly happens to auto financing if someone dies.  

    If you have a car loan and someone dies, the loan will most likely still need to be paid off. This automobile loan financing may be transferred to another person if they are able to make the payments, but the lender will still need to be paid in full. In case this loan is not paid off, the car may be repossessed by the lender.  

    These are just some of the reasons why it’s essential for a borrower to read the terms and conditions of a loan before signing anything. 

    Table of Contents

    • What Happens to a Car Loan If a Car Owner Dies?
    • Who Might End Up Making the Payments After the Car Owner Dies?
    • What to Do After a Car Owner’s Death?
    • What Are Some Payment Options If You Inherited a Car Loan?
    • Final Thoughts

    What Happens to a Car Loan If a Car Owner Dies?

    When a car owner dies, their loan does not necessarily die with them. If the car was purchased using a loan, the lender will still require that the loan be paid off in full, even though the borrower is no longer alive. In some cases, the lender may allow the surviving family members to assume the loan and continue making payments. 

    However, this is not always an option and it depends on the terms of the vehicle loan borrower agreed on. Additionally, if this loan cannot be assumed by another party, then the surviving family members will likely have to sell the car in order to pay back the borrowed money.  

    Car Loan Death Clause

    After you get a car loan, like with any other arrangement of this kind, you have agreed to make payments on the loan for a certain period of time. But before signing anything, you may be wondering, what happens if something goes wrong and you can’t make the payments anymore? That’s where the death clause comes in.  

    The death clause is a provision in your car loan financing contract that says what will happen to the loan if you die. In most cases, the lender will require that the loan is to be paid off in full even if you are no longer among the living. This means that your family will need to come up with the money.  

    If you decided to get a co-signer when you were applying for automotive financing, they will be responsible for making the payments if something happens to you. Or, in some rare cases, the lender could allow your family to take over the payments instead of a co-signer. It all depends on the terms of your loan contract.  

    So, if you’re thinking about getting a car loan, be sure to read the death clause carefully so you know what could happen to the car and auto loan you took out.  

    Community Property States

    Let’s say you live in a community property state, well, in this case, your car loan may be subject to division during a divorce. In community property states, all assets and debts acquired during the marriage are considered jointly owned by both spouses. This means that if you take out car financing during your marriage, your spouse may be legally responsible for repaying the debt even if they are not the primary borrower on the loan.  

    If one spouse dies, the surviving spouse will be responsible for repaying the entire loan if they live in a community property state. This debt is considered to be jointly owned by both spouses, so there is no way out of it. In case the surviving spouse is unable to repay the loan, the lender may attempt to collect from the estate of the deceased spouse.  

    Who Might End Up Making the Payments After the Car Owner Dies?

    Well, the simplest answer to this is that whoever inherits the vehicle will be responsible for making the payments. The car can be leased and then the lease will likely be terminated and the heir will be responsible for any early termination fees.  

    If the car is financed, then the lender may demand that the balance of the loan be paid in full or may allow the heir to assume responsibility for making the payments.  

    This all depends on the lender that the borrower chose, so go over the loan agreement once again to gather all the necessary information. 

    What to Do After a Car Owner’s Death?

    Nobody likes thinking about their own death, but, if you plan on taking out a loan, you should consider how your death will affect those around you in a financial way. Having automobile financing and the primary borrower passes, the loan may become due immediately. This is because most car loans require that the borrower maintain insurance on the vehicle. If the borrower dies and the insurance policy lapses, the lender may demand that the loan be repaid in full.  

    In case you are the spouse or child of the deceased borrower, you may be able to assume the loan and continue making payments. However, this will depend on your relationship with the lender and whether or not you can qualify for the loan on your own.   

    If you are not able to assume the loan, you will need to repay the outstanding balance of the loan. You may need to sell the vehicle to do this, but if you owe more than the vehicle is worth, you will need to come up with the difference in cash.  

    After a car owner’s death, their family members are often left wondering what to do with their car loan. If you find yourself in this situation, be sure to contact your lender as soon as possible to discuss your options.  

    What Are Some Payment Options If You Inherited a Car Loan?

    There are a few options available to you if you find yourself in the position of inheriting a car loan. You can choose to continue making payments on the loan and keep the car, sell the car and use the proceeds to pay off the loan, or simply hand the car over to the lender and be done with it.  

    Obviously, each option has its own set of pros and cons that you’ll need to weigh before making a decision. Keeping the car means you’ll have transportation but you’ll also be stuck with monthly payments. If you sell the car, you may be able to pay off the loan completely but you’ll have to find another way to get around. And if you just hand the car over to the lender, you won’t have it anymore but you also won’t have a debt hanging over your head.  

    The best option for you will ultimately depend on your personal circumstances. If you need a car and can afford the payments, keeping it may be the way to go. But if you don’t need a car or can’t afford it, selling it or giving it back may be a better choice.   

    Final Thoughts

    It’s crucial to think about what would happen in this scenario as well, if you are considering getting into the world of automotive loans. While it may not be the most pleasant topic to think about, it’s important to have a plan in place in case something does happen to you.  

    You cannot really go around expecting from a lender to forget the outstanding amount if you die. It’s only logical from the lender’s perspective to repossess the car or expect someone else to pay the amount borrowed.  

    Talk to your family about your plans and make sure they know what to do if something unfortunate happens to you. 

    Want to trade?

    Wondering how to know if your broker is safe? How to avoid dealing with swindlers? We'll help you find the best broker that suits your trading style and skill level.

    Fill out the form to find the perfect broker for your trading needs! 100% Free advice.

    Auto Loans By State
    ‎Home Equity Loans By States
    ‎Mortgages By States
    ‎Personal Loans By State
    ‎Student Loans By State
    Auto Loans By State
    AL
    AK
    AS
    AZ
    AR
    CA
    CO
    CT
    DE
    DC
    FL
    GA
    GU
    HI
    ID
    IL
    IN
    IA
    KS
    KY
    LA
    ME
    MD
    MA
    MI
    MN
    MS
    MO
    MT
    NE
    NV
    NH
    NJ
    NM
    NY
    NC
    ND
    MP
    OH
    OK
    OR
    PA
    PR
    RI
    SC
    SD
    TN
    TX
    UT
    VT
    VI
    VA
    WA
    WV
    WI
    WY
    ‎Home Equity Loans By States
    CA
    CO
    CT
    DE
    DC
    FL
    GA
    HI
    ID
    IL
    IN
    IA
    KS
    KY
    LA
    ME
    MD
    MA
    MI
    MN
    MS
    MO
    MT
    NE
    NV
    NJ
    NM
    NC
    ND
    OH
    OR
    PA
    RI
    SC
    SD
    TN
    UT
    VA
    WA
    WI
    WY
    ‎Mortgages By States
    WY
    WY
    WY
    CA
    CO
    CT
    DE
    DC
    FL
    GA
    HI
    ID
    IL
    IN
    IA
    KS
    KY
    LA
    ME
    MD
    MA
    MI
    MN
    MS
    MO
    MT
    NE
    NV
    NJ
    NM
    NC
    ND
    OH
    OR
    PA
    RI
    SC
    SD
    TN
    UT
    VA
    WA
    WI
    WY
    ‎Personal Loans By State
    CA
    CO
    CT
    DE
    DC
    FL
    GA
    HI
    ID
    IL
    IN
    IA
    KS
    KY
    LA
    ME
    MD
    MA
    MI
    MN
    MS
    MO
    MT
    NE
    NV
    NJ
    NM
    NC
    ND
    OH
    OR
    PA
    RI
    SC
    SD
    TN
    UT
    VA
    WA
    WI
    WY
    ‎Student Loans By State
    CA
    CO
    CT
    DE
    DC
    FL
    GA
    HI
    ID
    IL
    IN
    IA
    KS
    KY
    LA
    ME
    MD
    MA
    MI
    MN
    MS
    MO
    MT
    NE
    NV
    NJ
    NM
    NC
    ND
    OH
    OR
    PA
    RI
    SC
    SD
    TN
    UT
    VA
    WA
    WI
    WY
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    FinTopiAuthor
    • Facebook
    • Twitter
    • LinkedIn

    The FinTopiAuthor, who prefers to remain anonymous for now due to privacy reasons, has a bachelor’s degree in finance and over 10 years of experience in financial planning and bank loans. For the last 3 years, they’ve been working as a freelance copywriter in the niche of financial products, investing, and money lending, with the special attention to pros and cons of different loan types. Besides an interest in financial topics, they’re keen on traveling and various adventures.

    Related Posts

    Cuso Mortgage Review – Can You Depend on Their Advice?

    May 14, 2023

    Metro Credit Union Mortgage Review – Is it a Secure Option for Your Money?

    May 13, 2023

    Lyons Mortgage Services – An Overview of Services and Reputation

    May 12, 2023

    ‎Auto Loans In West Virginia

    January 27, 2023
    Add A Comment
    Leave A Reply Cancel Reply

    Table of Contents

    Table of Contents

    • What Happens to a Car Loan If a Car Owner Dies?
    • Who Might End Up Making the Payments After the Car Owner Dies?
    • What to Do After a Car Owner’s Death?
    • What Are Some Payment Options If You Inherited a Car Loan?
    • Final Thoughts

    You Lost Money?

    Get Your Money Back

    Copyright © 2022-2023 Fintopi. All trademarks are the property of their respective owners.

    What's Hot

    Exteom Review: EU Traders Are Lured in Fraud Again
    June 14, 2023
    Immediate Edge Review: No Regulation, No Сonscience
    June 13, 2023
    When Is the Best Time to Buy a Car? A Comprehensive Guide
    June 12, 2023

    Company

    • Homepage
    • Sitemap
    • Privacy Policy
    Disclaimer: We do our best to ensure that the information on our site is up to date and accurate. This information may differ from what you see on the websites of the companies we mention. All products and services are provided without warranty of any kind. When evaluating offers, you should check the terms and conditions of the product and/or company and/or company. Trademarks, product names, logos and others mentioned on Fintopi are the property of their respective owners. The information we present is for educational purposes only and you should consult with a licensed financial professional before making any financial decisions.

    Type above and press Enter to search. Press Esc to cancel.