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What happens to a car loan if you die?
I often have the most random thoughts in the shower, and just this morning, I was thinking about cars and why we don’t have flying ones yet. Unfortunately, the topic quickly turned a bit darker, and now I’m curious—what happens if you pass away and still have a car loan?
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Shower thoughts can get a bit wild—I wish I could tell you why we don’t have flying cars yet! However, I can answer your second question.
In the unfortunate event you pass away, your
car loan
will not be forgiven after you die. It will have to be taken over or paid off. You can read through your loan agreement’s death clause for information specific to your loan.Broadly speaking, the debt is usually handled by:
- Using funds from your estate to pay off the loan and take full ownership of the vehicle
- Having a family member take over the loan
- Letting the lender repossess the vehicle
Hopefully, this is something you and your family won’t have to worry about for a while, but it is always wise to plan ahead. You can ensure your car loan is handled appropriately after your death by outlining your wishes in your will or estate plan.
In the meantime, let’s focus on something more positive—like saving big bucks on your
car insurance
! The Jerry
app makes it quick and easy.A licensed broker, Jerry does all the hard work of finding cheap quotes from the top name-brand insurance companies and buying new car insurance. Jerry will even help you cancel your old policy. The best part? The average Jerry user saves $879 a year.
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