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What will happen to my car loan if I die?

My friends and I just celebrated our 50th college reunion, and like most old people, we quickly got on the topic of death. We talked about friends we miss, checked in on friends we hadn’t seen in a while, and also got on the subject of what happens when we die. It was primarily small talk, but gave me a lot to think about. My affairs are mostly in order, but what happens to your car loan if you die?

avatar
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Before we start talking about death, congratulations on the 50th college reunion! Those conversations can be difficult, but it’s good you’ve thought about it and have your affairs in order.
Now, to answer your question, if you die, your
car loan
is not forgiven. Typically, a relative will need to take over the loan or pay it off. You can find more specific information about your loan by reading the death clause in your loan agreement.
If you’d like someone to inherit the car or have other wishes, include it in your will or estate plan. If you don’t leave behind instructions, the executor of your estate will be responsible for making a decision.
The most common ways to settle a car loan when the owner dies is by:
  • Having a relative keep the vehicle and take over the loan
  • Using funds from your estate to pay off the debt
  • Permitting the lender to repossess the vehicle
Finally, if you want to help reduce any potential financial burden, consider
refinancing your car
. On average, car owners pay $85 less every month by refinancing their auto loans. For an easy way to explore your options, use the
Jerry
app. Jerry instantly connects you with top refinancers that will give you the best rate for your budget.
View full answer 
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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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