My Car is up for repo my grandfather is a co signer on the car and recently just passed. I heard that the car will be paid off.. Is that true? By the granffather that passed. I was told that because he passed that since it is up for repossession that it will be paid off.

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    However, the bank holding the loan will not automatically give you the title to the car and write off the loan just because your grandfather passed away. – Karen Sep 5 '19 at 18:33
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    What do you mean by "up for repossession"? Either it's been repossessed or it hasn't - are you just behind on the payments? – D Stanley Sep 5 '19 at 18:44
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    Use this one trick to get out of your car loan, auto lenders HATE this! – user1723699 Sep 6 '19 at 14:02

The short answer is, the lender is going to do everything they can to get the money owed to them. Someone dying does not mean that they will suddenly give up on collecting the loan. And, generally, the situation you describe leaves several avenues for them to do so:

  • If the primary on the loan (you) is making payments on schedule, and continues to do so, then effectively nothing changes.
  • If you stop making payments, and the loan contract has a "successor clause" (most auto loans do), the lender is entitled to seek repayment in full from the deceased cosigner's estate. If or when that will actually happen will depend on many factors, including assets and other debt in the estate, and potentially court decisions on the order in which the debts are satisfied.
  • As a last resort, if the primary is not making payments, and the deceased cosigner's estate is not liable (there was no successor clause) or is unable to pay back the loan, the bank can still use the lien they have on your vehicle's title to repossess your vehicle. The fact that a cosigner has died does not mean that they are not allowed to take your car or will not try to take it, if you stop paying them.

Keep in mind also that some loans are sold with insurance that will pay the loan back if the consumer dies (or is disabled in a way that prevents them from earning an income and paying the loan back). Some of these policies cover only the primary on the loan, others will cover cosigners as well. So, it's worth checking if your loan has such a policy (although, I'm assuming it doesn't, considering the nature of your question).

  • "Someone dying does not mean that they will suddenly give up on collecting the loan." Why in the heck would they? – RonJohn Sep 5 '19 at 19:33
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    I clarified that because the OP seemed to be indicating that they would be getting a free ride on the loan because of the death. – dwizum Sep 5 '19 at 19:48
  • Yeah, I noticed that too. smh. – RonJohn Sep 5 '19 at 19:50
  • Assuming there is no insurance, the only legitimate way that the OP will get out from payments and get to keep the car is if they are not making payments and the lender decides to go after the grandfather's estate, and is able to get money from it. But given how complicated that process can be, and how low down the list of debts a cosigned loan will be, they may just decide to repo the car instead. – dwizum Sep 5 '19 at 20:17

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