Car on finance when someone dies
Car on finance is a procedure in which you borrow money and then return it over time (read more). During this time, anything unexpected could happen, including a death of the borrower. What would happen in this case? Would the loan be forgiven or will the kin have to pay it instead?
Of course, the payment to the lender stops when a person dies. In such a case, the lender has the right to repossess the car. It is important to inform the lender about the death of the person so that arrangements can be made about whether the vehicle has to be returned to a lender or if the payments will be paid to the lender in future. This depends on the person who inherits rest of the property of the deceased. Whether the person can afford the car payments and wants the particular car all contributes to the decision.If there is a will, things become easier, and the car is automatically transferred to the name of the person.
However, the loan is not transferred automatically. The lender must be contacted and informed. The lender then informs about the procedures and paperwork needed to transfer the loan in the name of someone else. Usually, a death certificate is required, and the person making the decision has to sign the paperwork. If the person wants to give up the car and agreement, that is also discussed with the lender. The car company then repossesses the vehicle. In this case, too, the person who makes the decisions signs all the paperwork.
The deceased’s debts become the state’s responsibility. Car on finance is included in these debts. There is a chance that if the loan is transferred by a will, the state might pay for it. The whole process could be time-consuming sometimes. The transfer of loan and ownership of car requires court work. There could be a probate involved which could go on for months. This situation can be avoided if the will describes the inheritance process, including possession of car and transfer of Car on finance.