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Without seeing the sales agreement and/or loan agreement, it's impossible to answer your question with any certainty. But assuming that both agreements are fairly standard, boilerplate sorts of things, then here's the basic situation: If your husband, as co-signer, was smart enough to insist on finance insurance on the deal (or if the dealership F&I person was smart enough to sell it with the deal and if neither your grandmother nor your husband opted out of it), then the finance insurance policy will pay-off the car in full just as soon as your husband files a claim and sends the finance insurance company a copy of the death certificate.

If, on the other hand, no finance insurance policy was purchased by your grandmother and your husband at the time of contract signing, then your husband must continue making payments (or must sell the car and use the proceeds to pay-off the loan... whichever he prefers). That's what co-signers do: When the principle borrower cannot pay for any reason -- including death -- then the co-signer must honor the contract.

If finance insurance pays off the car loan, then the car is free and clear, but it's in her name. Therefore, her estate has possession of the vehicle and neither you nor your husband can simply take it -- especially if she's intestate (had no will).

If there is no finance insurance, and your husband, therefore, must pay it off, then even though it's in possession of her estate it's a fairly easy process to show the executor or administrator of her estate that he's now on the hook for the payments as the co-signer and, therefore, the vehicle needs to be conveyed to him so he can either continue making payments on it or sell it or whatever he plans on doing with it.

If he sells it, he will not be able to give a free and clear title to it to the buyer until the car loan is satisfied. So if he sells it, he must first call the loan company and get a cash payoff amount. Whatever he sells it for must be equal to or more than the cash payoff amount or he'll end-up paying some cash out of his pocket because by hook or by crook that finance company is getting the cash payoff amount... period.

It's probably worth sitting down with an attorney for an hour or so and getting proper legal advice. What happens as far as who has to pay-off the car is pretty straightforward and doesn't really require your talking to an attorney. But you don't want to mess with taking things which belong to her estate until and unless you're legally allowed to. And that's a probate issue -- one worthy of chatting with attorney about, even if only briefly.

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โˆ™ 2011-01-30 14:27:27
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Q: What happens to a car loan if the borrower dies?
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Related Questions

What happens if you co-signed a car loan and the primary borrower dies?

You are still respnsible for paying should the borrower die.


What if happens if you cosigned for car loan and the borrower files for bankruptcy?

if the consigner files bankruptcy can the borrower take the car


What happens if a co signer on a car loan passes away?

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What happens to a car loan when the borrower dies and has no will or power of attorney and her kids are left without any documents stating they can now have the car?

The car is still subject to the loan, so the bank has control. Typically the bank will sell the car and pay off the loan, anything remaining would go to her estate.


What happens to the car once the borrower dies?

Money owing on a car loan is still due, and payable by the estate of the deceased borrower. It's conceivable that certain loans may accelerate payments in the event the borrower dies. In any case, the executor of the estate should make payments as they become due, as with other obligations of the deceased. If a conflict develops between the executor and the bank concerning the loan, an attorney should be consulted.


If the primary borrower on a cosigned car lease dies. what happens to the car?

The person who's name is on the Title is the owner of the car.


Are a primary borrower and a secondary borrower on a car loan equally responsible for the loan?

Yes, the cosigner/co-borrower has the same legal responsibility to repay the debt/loan as does the primary borrower. If the primary defaults the creditor can attempt to collect from the co-borrower before the primary borrower.


Is there a way to get a car loan without a job or co-borrower?

Yes. Deposit the amount of money the car costs in a bank, in a CD, and use it as security for the loan that the bank will give you to buy the car.


What happens when a co signer dies and you stop paying on car loan?

bank takes back


If your husband co-signs for his daughter's car loan will that affect you when you want to get a car loan?

No, not if the wife is the sole borrower.


What happens to the car and title if primary person on car loan dies and the secondary person has survived?

The estate has to settle the title. The secondary person can be held responsible for the loan until it is resolved.


Can a car borrower add his sister to the vehicle registration if she is not on the loan?

NO Because there is a lien on it.


Does the co-signer of a car loan need income?

Yes, since the co-signer is fully responsible for paying the loan if the primary borrower does not.Yes, since the co-signer is fully responsible for paying the loan if the primary borrower does not.Yes, since the co-signer is fully responsible for paying the loan if the primary borrower does not.Yes, since the co-signer is fully responsible for paying the loan if the primary borrower does not.


What happens if a relative cosigns for a business loan and he dies?

my mother cosigned for a leased car for my sister. my mom has died. what do we do with the car? will my sister now be responsilbe?


What happens when your husband dies leaving an outstanding car loan?

The lending institution can place a claim for payment against the estate.


If you have a car loan and the engine dies and will cost more to replace then the car is worth is there anyway out of the loan?

Nope.


What takes places in the process of automobile refinancing?

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What are the rights of a borrower on a car loan?

Very little actually. They have the right to use the vehicle as long as they are current in their loan payments to the lender (who is the ACTUAL owner of the car, until the loan is paid off).


What makes a loan a secured loan?

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Can the primary borrower on a car loan take the vehicle away from you?

YES IF YOU DO NOT FOLLOW THROUGH WITH YOUR AGREEMENT.


Is it illegal to make payments on a car after the borrower is deceased?

The bank needs to know the borrower is deceased. I do not know if they would transfer the loan to you. Make sure your car insurance is also paid up.


Can co signing for a car loan affect financial aid?

Yes. It may affect financial aid because it will be considered a loan that you're responsible for. You should know that if the primary borrower defaults on the car loan you will be have to pay the remaining balance. You should make certain that you can afford to pay for the car if you agree to co-sign the loan.Yes. It may affect financial aid because it will be considered a loan that you're responsible for. You should know that if the primary borrower defaults on the car loan you will be have to pay the remaining balance. You should make certain that you can afford to pay for the car if you agree to co-sign the loan.Yes. It may affect financial aid because it will be considered a loan that you're responsible for. You should know that if the primary borrower defaults on the car loan you will be have to pay the remaining balance. You should make certain that you can afford to pay for the car if you agree to co-sign the loan.Yes. It may affect financial aid because it will be considered a loan that you're responsible for. You should know that if the primary borrower defaults on the car loan you will be have to pay the remaining balance. You should make certain that you can afford to pay for the car if you agree to co-sign the loan.


If your car is repossessed and sold for less than the amount owed do you have to pay the difference?

Yes. The borrower is responsible for the entire loan amount. The car is considered collateral for the loan. This does not imply that the loan value cannot exceed the collateral value. In fact this happens on almost every car loan, especially with new cars. The lender can repossess the car and sell it. They are required to apply the proceeds from the sale to the loan principal, but any remaining balance is the borrower's responsibility.


What happens to a loan on a car when the loan holder dies and there is no cosigner or insurance on the loan?

The loan must be paid out of the estate (sell of home, life insurance policy, etc...) Otherwise, the estate will be held up in litigation and will not be closed or the beneficiaries will be forced to pay the loan.


How do car title loans work?