When someone dies and leaves a car with an attached loan, the vehicle generally becomes part of the estate. If no will exists and the matter is not taken to probate court, you can usually become the owner of the vehicle. However, it is not as simple as sending in the payments from your checking account to the lender. Lenders do not simply add someone to an existing loan. Instead, the loan must be paid off and a new loan started.
Look over the car loan documents to see whether it is listed as a joint account. If you applied for the loan with the deceased, your name is already on it. This means that you can make the payments with no other actions necessary.
Contact the lending institution if you are not listed on the loan documentation. Inform the representative of the death and of your intentions to continue paying on the vehicle. The representative might request that you fax over the death certificate for their records, which allows them to change the title. Before ending your conversation, ask for the payoff amount on the loan.
Submit a used car loan application with your local bank or other financial institutions for the amount of the loan payoff. You can even apply through the same lender as the deceased person. Information needed for the loan information is typically your name, address, date of birth, Social Security number, employment details and income information.
Once you are approved for a loan, use the new car loan to pay off the deceased person’s car loan. This closes out that loan. You now make the car payments to the new lender for the vehicle.
Tips
You should also consult your local DMV or state vehicle registering office to get the registration changed over to your name. Fees for this vary. Usually a copy of the death certificate is required for this process.
References
- Pennsylvania DMV: MV-39 General Information
- Debt.org. "What Is a Loan Agreement?" Accessed Oct. 23, 2020.
- U.S. Department of Education Federal Student Aid. "The Standard Repayment Plan is the basic repayment plan for loans from the William D. Ford Federal Direct Loan (Direct Loan) Program and Federal Family Education Loan (FFEL) Program." Accessed Oct. 23, 2020.
- Corporate Finance Institute (CFI). "Amortization Schedule." Accessed Oct. 23, 2020.
- Consumer Financial Protection Bureau. "What is a prepayment penalty?" Accessed Oct. 23, 2020.
- Consumer Financial Protection Bureau. "Loan Estimate and Closing Disclosure: Your guides in choosing the right home loan." Accessed Oct. 23, 2020.
- Consumer Financial Protection Bureau. "What is a balloon payment? When is one allowed?" Accessed Oct. 23, 2020.
- Accion.org. "2 Different Types of Personal Guarantees Your Business Needs to Understand." Accessed Oct. 23, 2020.
- Consumer Financial Protection Bureau. "Know what is negotiable." Accessed Oct. 23, 2020.
Tips
- You should also consult your local DMV or state vehicle registering office to get the registration changed over to your name. Fees for this vary. Usually a copy of the death certificate is required for this process.
Writer Bio
Jamie Lisse has been writing professionally since 1997. She has published works with a number of online and print publishers. Her areas of expertise include finance and accounting, travel, entertainment, digital media and technology. She holds a Bachelor of Arts in English.