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What happens after you pay off your car loan?

I only have two months left until my car loan is paid off, and I’m curious. What happens when you pay off your car loan?

avatar
Jack Walsh · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Paying off your
car loan
 is a significant accomplishment, and you should feel proud!
Once the loan has been repaid, you have full ownership of the vehicle, and should:
  • Get your car title back. In many states, to get the title back, all you have to do is wait. The lender will take care of the paperwork to remove themselves as a
    lienholder
    , and you will receive and free and clear title in a few weeks. However, if you live in a non-title-holding state and currently possess the title, you’ll have to submit the lienholder release documents to the DMV yourself.
  • Notify your
    car insurance
     company that you no longer have a lienholder.
  • Shop around and review the
    types of coverage
     you need.
When you officially own the vehicle, you’ll no longer need to carry
comprehensive
 and
collision
 coverage. You can cute these from your policy, but it’s smart to keep to protect your car.
Additionally, if you want to ensure you aren’t overpaying for your insurance, use
Jerry
 to compare quotes from over 50 different insurance companies for free.
If you’re hesitant to switch plans or insurance providers because you’re worried about the work involved, don’t be. Jerry does all the paperwork for you and even helps cancel your old policy! And if you have any questions along the way, just text one of our agents through the app. They will always be there to assist you.
MORE:
Collision vs. comprehensive car insurance
Car LoansTitle TransfersAuto Loan Payments
View full answer 
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