What Do You Do With a Leased Car When the Owner Is Deceased?

Leasing a car can often be a way to afford a car that you would otherwise not be able to get. When the owner of a car lease passes away, the executor of the estate must figure out what to do with the car at that point. If you find yourself in this situation, examine the lease agreement to see what your options are.


Is the Lease Canceled?

When a loved one passes away with an auto lease, you may believe that the lease is automatically canceled because he is no longer around to make the payments. In most cases, the lease is not automatically canceled upon the death of the owner. Like other financial obligations, they still exist even if the individual passed away. This means that the lease is typically dealt with in the process of settling the estate.


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During the probate process, the lease will be handled. Probate involves collecting all of the outstanding assets and liabilities. The executor uses any remaining assets in the estate to pay liabilities in the proper order of priority. The probate court will offer guidance as to which bills need to be paid first. Any bills that are not paid after the money runs out are then forgiven by the creditors. If the lease is left after the money runs out, then it will be canceled.


Returning the Car

When a loved one with a lease passes away, you should not randomly return the car to the dealer thinking that this will get you out of the lease. While some people have taken this approach, it does not necessarily get rid of the lease. When a loved one passes away, check the lease agreement and find out if any provisions are available for deceased individuals. Some companies allow you to pay a fee and stop the lease payments when the car owner dies.



In some cases, you may be better off to transfer the lease to someone else. By transferring the lease, you typically only have to pay a nominal transfer fee to the dealership. Then another individual takes over the payments and starts using the car. If you have a family member who needs a vehicle, this is often a cheaper option than buying out the lease or trying to settle it. Check with the dealer to find out the process for transferring the lease.