PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
What happens when you pay off your car loan?
I have about a year left of payments until my car loan is paid off, but I’ve been thinking about paying it off early. It’s the first car loan I’ve had, and I’m curious: what happens once I pay off my car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Once you pay off your car loan, you own the vehicle outright, and the
lienholder
can be removed from the vehicle’s title. Many states are title-holding, meaning the lender holds onto the title until the loan has been repaid. In these states, the lender usually removes themselves from the title and mails you a free and clear title within a few weeks of your last payment. However, if you live in a non-title-holding state, you should already have possession of the title and will have to contact the DMV to remove the lienholder.
One thing to check before you pay off your loan is if your lender has
prepayment penalties
. Some lenders will charge you for paying your loan off early, negating the financial benefits. Check your loan contract or contact your lender. Once you pay off your car loan, you can drop your
comprehensive
and collision
coverage, although it can be beneficial to keep. Regardless of whether or not you drop the full coverage, you should update your car insurance
company and compare quotes from multiple insurance companies to ensure you’re getting the best rates. 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.View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
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.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies