What happens to a car loan when the owner dies? This is a question that often comes up after someone passes away and has a car under their name. When someone dies, their estate goes through probate, and the executor of the estate has to take care of all the deceased's financial obligations. This includes car payments. Keep reading to find out what happens to cars when someone dies and how you can take over a car loan, if desired.
What happens to a financed car when someone dies?
If the car is paid off, the estate can take ownership of the car. If there is still money owed on the car, the estate will have to pay off the remainder of the loan. In some cases, a repossession may occur if the estate cannot or does not want to pay off the remaining balance.
The estate is considered the responsible party when it comes to managing loans and outstanding payments on any bills or payments after a death occurs. The exception to this is if there are cosigners or co-borrowers on the car. If there are cosigners on a car loan and the original owner dies, it's up to the cosigners to assume responsibility for the car payments.
Who is responsible for a car loan after a death?
The primary responsibility will fall to any cosigners or coborrowers on the loan itself. If a spouse or another individual cosigned on a loan for a car, they are then responsible to take over car payments on the car loan after a death. If they cannot afford the payments, the car may be repossessed by the lender.
If there were no cosigners, the estate is responsible for maintaining payments on the car loan. If the estate is insolvent (an insolvent estate is when the debts owed outweigh the value or assets that the estate has), the lender will likely repossess the car to recoup their losses.
Can I keep driving a deceased person's vehicle?
The estate needs to give the person who wants to drive the car permission to drive it while the estate is going through probate. Additionally, the individual driving the car needs to have insurance and a valid license in order to operate the vehicle.
How to return a leased car early after death
If the car is not willed to a beneficiary, you can opt to cancel the lease agreement early. If the car was being leased and you want to end a lease agreement early after a death has occurred, you'll need to get in touch with the organization in charge of the lease agreement.
Check the lease terms
Some companies (such as Mercedes-Benz and Ford Motor) have forgiven lease obligations in the past when the owner has passed away. Not all leases end when someone dies and you'll need to find out if there's a car loan death clause included in the car lease agreement. If you don't have access to the car lease agreement, you can try getting in touch with the company that issued the loan and see if there are any special terms that address the death of the owner.
Figure out the fees
If you decide you want to end the car lease after death and there is time left on it, you'll need to prepare to pay early cancellation fees. The early cancellation fee is typically the difference between what the company can get if they sold the car and how much is due on the lease. You'll want to contact the company that leased the vehicle and explain that the owner has passed away and that you'd like to end the lease early. Check with the representative to see if there is an early termination fee, if there's a clause that releases you from payment responsibility, and what the remaining payments on the lease are.
Consider your next steps
Depending on the lease agreement, the presence (or lack of) a death clause, and the amount of money owed on the lease, your options are going to vary. In some cases, you may find that it's cheaper to simply pay off the car and keep it. You also may find yourself with a family member or relative that's in need of a car and wouldn't mind having the lease transferred to them. or, you may find out that the estate doesn't have the ability to cover the costs of the car and that no one is interested in taking over the lease. In all of these cases, you'll want to get in touch with the lender to pursue next steps.
Transferring the loan
If you have someone who is interested in assuming a car loan after the death or you want to prevent repossession of the car after a death, you can transfer the loan into another person's name. Here's what you'll need to do in order to transfer the loan:
- Notify the lender of the death. This is typically done by sending a death certificate and a letter to the lender notifying them of the death. They may send back paperwork or request additional documentation regarding the death.
- Continue paying the loan. It's important that you remember to continue making payments on the car loan even while you're in the process of ending the loan or transferring it. If you fail to make payments on the loan, the car lender can repossess the vehicle. The estate or the cosigner is responsible for making payments on the car.
- Consider refinancing the loan. You may be able to secure better terms or rates on the loan if you consider refinancing it. Consider talking with a financial advisor or the lender regarding refinancing options.
Below you’ll find a list of major auto loan companies and organizations along with instructions on how to get in touch with them if needed.
- Call them first at 1-877-247-2559. They’re not able to provide specific account info until you send in documentation, but they ask that you call them first anyways.
- Gather documents. You need different documents depending on the type of account that was open with them. For a full list of accounts, go here.
- Send in documents. A customer associate will get back to you in 10 days.
Mail documents to:
P.O. Box 951
Horsham, PA 19044
- Get a death certificate and gather information (you’ll need to know the person’s full legal name and their social security number)
- Notify them in one of the following ways:
- Online. (You’ll need a Wells Fargo username and password in order to do this)
- In person: Take the required documents to an in person appointment.
- For investment accounts, take the documents to the customer’s dedicated financial advisor.
- By mail: Close or transition deposit accounts by sending a notarized Letter of Instruction to:
Wells Fargo Exception Payments
Attn: Estate Processing
7711 Plantation Road, 1st Floor
Roanoke, VA 24019
You need the following types of documents:
- Court-issued document appointing an executor/administrator or
- Small estate affidavit in accordance with state laws
Jointly-held accounts, or accounts with named beneficiaries:
- Identification of the joint account holder or beneficiaries
- Certificate of Trust naming a successor trustee
- Call the Client Service Center at 1-800-392-5749, option 1 (M-F, 8AM - 9PM ET) or visit a local branch to notify Chase of the death.
- Make sure you are eligible to get information regarding the decedent's assets (only certain individuals are authorized to receive this information, such as beneficiaries or executors).
- Identify the type of account the decedent held and check for the documentation required for the account. Additional documentation may be required.
- Gather the required documents and fax all documentation to 1-855-605-0487.Find out Chase’s required documentation here.
- Call 1-877-383-4802 between 9-11 EST to get a case number. You'll receive a cover sheet and a packet via email within a few days of making this call. Once you've received the case number and cover sheet, you can submit your documents through fax or email.
- Submit your documents.
Mail (fax or email is quickest):
PO Box 360
Wilmington, DE 19899
(Submit only copies, they will not return any originals to you.)
Note: When submitting documents, be sure to attach the cover sheet that was emailed to you. If you're submitting documentation via email, include the documentation as attachments and ensure the subject line includes the case number you were assigned.
For most estates, here's the documentation you’ll need to submit:
- A death certificate copy
- If you're an executor, a copy of a court-official 'Letter of Administration' or 'Letters of Testamentary', dated within the last 2 yearsDepending on your state guidelines, you may need just a notarized Small Estate Affidavit or an Affidavit for Collection of Personal Property
- A copy of the Letter of Instruction for each beneficiary and/or executorCo-executors can send in a single Letter of Instruction, if they want to, must be signed by both parties
- A copy of a piece of government-issued identification for all executors and/or beneficiaries
You'll want to get in touch with customer service by calling 800-874-8822.
Contact their customer service department by calling (800) 392-3673, a full list of support contacts can be found here.
Bank of America
- Notify Bank of America of the passing. Once they're notified, you'll receive a case number and will have a specialist assigned to your case.
- Send a copy of the death certificate, plus any additional required documentation that your state law requires.
- The specialist will review the documentation and get back to you if any additional documentation is required.
- Once documentation is approved, account(s) can be opened and the funds can be transferred to existing accounts, or disbursed at your instructions.
You can also contact Estate Servicing at 888-689-4466 (Mon-Fri 8 a.m.-8 p.m. ET).
Documentation you'll need:
- Personal information. The full legal name and Social Security number of the decedent.
- Death certificate.
You may also need to provide:
- Small Estate Affidavit.
- Letters of Administration or Letters Testamentary.
- Call 800-872-2657 or visit a local branch.
- Gather the required documents.
- Proof of death (you can submit copies or original death certificates)
- Account information (Past statements, letters, or past bills)
You'll also need to include documents that show responsibility to act on behalf of the decedent's estate, trust or affairs. Some examples include:
- Probate documentation
- Small estate affidavit
- Collection of personal property
- Executor paperwork
- Representative paperwork
- Letters of testamentary
- Trust documents
- Additional documentation for home mortgage or loan accounts
- Last will and testament
- Trust documents
- You may also need:
- Valid ID (one of the following)
- State driver's license
- State ID card
- U.S. passport
- Military ID
- U.S. alien registration card
Handle tasks with our checklist
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Last updated February 25, 2022
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Does a Car Lease End Automatically When You Die? Unfortunately, your car lease terms will remain in effect after your death. Regardless of how many payments were left unpaid when you died, all of it must be repaid in full after you pass.
Your car finance debt does not disappear after you die
If you have a personal contract purchase (PCP), hire purchase (HP), personal loan or any other kind of borrowing to finance your car, that debt remains payable even in the event of your death.
A lease shall come to an end if the lessee dies before the expiry of ten years, the time till which the lease was made.
Generally, contracts of the dead survive to haunt the living; the executor or other successor must perform the decedent's remaining contractual duties. A major exception is that personal service obligations die at death.
Car loan after your death
Car loans are not forgiven at death so, if your estate can't cover the debt, the person that inherits the vehicle needs to decide whether they want to keep it. If they do want to keep the car, the inheritor can take over the auto loan payments and maintain possession of it.
It doesn't matter whose name should come first on a car loan; it's merely a formality. The only thing that truly matters is that both you and your wife can successfully apply for the loan.
When someone dies with an unpaid debt, it's generally paid with the money or property left in the estate. If your spouse dies, you're generally not responsible for their debt, unless it's a shared debt, or you are responsible under state law.
Most of the time, the car lease will become part of the deceased car lessee's estate. If the estate has sufficient assets, the estate will be required to pay the remaining payments on the car lease.
Property in insolvent estates
This is called an insolvency administration order, the creditor has five years to apply from the date of death.
In instances where you wish to end the term early (known as “early termination”), you will normally have to pay a minimum of 50% (half) of the remaining rentals. With some finance companies you will have to pay all of the remaining rentals in order to early terminate the vehicle.
If Service SA is notified that a member of a joint ownership has died, the vehicle registration will be automatically transferred to the surviving owner. If Service SA is yet to be notified of the death, you may request the transfer by supplying one of the following: a death certificate.