What Happens to the Car When the Owner Passes Away?
A car may be one of the many assets left behind upon someone’s death. Family members of a deceased car owner may choose to keep or sell the car.
This article will help you to find out more about the necessary steps to take with regard to the deceased’s car and will cover the following stages:
- Transfer car ownership; and if you decide not to keep or continue driving the car, then
- Sell the car; or
- De-register and dispose of the car.
Before finding out about the steps for each stage, it is important to find out more about the ownership, and financing of the car.
How is the New Owner of the Car Decided?
Apply for a Grant of Probate if the deceased wrote a will
As the car falls within property of the deceased, it forms part of the deceased’s estate (all assets/property owned by the deceased).
If the deceased has written a will, the deceased might have bequeathed the car to a beneficiary (person who is to receive the inheritance) in the will.
The new owner of the car will hence be decided according to the will.
The executor (responsible for carrying out the wishes of the deceased) of the will may apply to the court for a Grant of Probate, to administer the distribution of the estate according to the instructions in the will.
Apply for a Letter of Administration if the deceased did not write a will
If the deceased has not written a will, i.e. he has “died intestate”, or the car is not included in the will, the car will be part of the deceased’s estate which is to be distributed according to the rules in the Intestate Succession Act.
You may apply to the court for a Grant of Letters of Administration. The court will appoint an administrator to administer the distribution of the estate.
Apply to the Public Trustee if the deceased’s estate is less than $50,000
Where the deceased’s estate is less than $50,000 in value and no grant of probate or letters of administration have been filed (subject to other conditions), you or the executor may apply to the Public Trustee Office for a Letter from the Public Trustee to act for you.
What is the Criteria to Transfer Car Ownership?
When a vehicle changes hands, the ownership of the vehicle must be transferred to the new owner within 7 days.
However, a car can only be transferred provided that:
- The car does not have any outstanding matters, such as financial loans or road tax arrears (see below);
- The car is more than 3 months old if it is a car registered with a Category A Certificate of Entitlement (COE) (i.e. car up to 1600cc and 97kw) or Category B COE (i.e. car above 1600cc or 97kw); and
- The Letter of Administration, or Grant of Probate have been submitted.
What Happens If the Car has an Outstanding Loan?
How will the car loan be paid?
If the deceased has taken out a car loan that is not fully paid up at the time of the deceased’s death, the car loan is typically paid out of the estate of the deceased. This means that the beneficiary would not have to pay for the car loan.
However, if the car loan was taken out of a joint account held by the deceased and someone else (usually the spouse of the deceased), the other joint account holder will be responsible for paying off the remaining car loan.
Can the car be transferred if the loan is not paid off?
Until the outstanding loan on the car is fully paid off, the ownership of the car cannot be transferred to a new owner.
What Happens If the Car is on Hire-Purchase?
How will the car loan under hire-purchase be paid?
If the car loan was taken out under a hire-purchase scheme (instalment plan), this means that legal ownership of the car belongs to the hire-purchase company until the car loan is fully paid up.
The car loan is therefore secured against the car, i.e. the value of the car will be used to pay up the car loan in the event that the loan cannot be paid by the debtor.
In such a situation, it is likely that the hire-purchase company will repossess the car and sell it off to cover the unpaid portion of the loan.
If the residual value of the car (i.e. the remaining value of the car after accounting for depreciation) at the time of repossession is insufficient to offset the loan, the outstanding amount will be paid out of the estate of the deceased.
Repossession of the car may be avoided if the loan is fully paid upfront in a one-time payment, e.g. by the new owner. This may mean that the new owner might have to take out a new car loan under his or her own name.
Can the car be transferred if it is still under hire-purchase?
If the car is still under hire-purchase, the new owner must liaise with the relevant hire-purchase company to ensure that the financing of the car is being taken care of.
This means that the outstanding car loan owed to the hire-purchase company must be paid off (via the methods mentioned above).
Once the car loan has been paid off, the relevant person (see below) can transfer ownership of the car.
Who Can Apply to Transfer Ownership of the Deceased’s Car to Their Own Name?
When a registered owner of a car is deceased, the administrator/executor of the deceased’s estate or, the beneficiary of the car may apply to transfer the vehicle registration to his or her name upon submitting the relevant documents (discussed below).
If the car is to be transferred to a third-party (e.g. if the new car owner decides to sell the car), the ownership must first be transferred to the executor/administrator.
Once the car has been sold, the current person taking possession of the car must effect a transfer of vehicle registration within 7 days.
More below on selling a car.
What is the Procedure for Transferring Ownership of the Deceased’s Car?
You may apply to transfer the ownership of the deceased’s car using the Transfer Application Form (M01), which can be downloaded from the One Motoring website.
The following supporting documents are also required to effect the transfer of car ownership:
- Certificate of death;
- Grant of Letter of Administration (declaring the new owner) or Grant of Probate or Letter from the Public Trustee on the administration of the deceased’s estate, where applicable;
- Original motor-insurance certificate (taken out by the new owner)
- Original vehicle inspection certificate issued by an LTA-Authorised Inspection Centre (if vehicle inspection is required prior to the renewal of road tax).
- Administrator/Executor’s original NRIC (for Singaporeans/PRs) or Employment/Immigration pass card issued by Ministry of Manpower (MOM) or Immigration and Checkpoints Authority (ICA) (for foreigners), where applicable;
These documents, together with the transfer form, must be submitted to the Land Transport Authority (LTA) in person at:
LTA Customer Service Centre
10 Sin Ming Drive
The transfer will take immediate effect upon submission of the documents to LTA and payment of the $25 administrative fee.
Note that if the car is 4 to 6 months old and registered with a Category A or B COE, an additional levy may be imposed to offset the positive difference between the Quota Premium (QP) paid for the car’s COE and the QP in the car’s COE category at the time of transfer.
Can I Continue Driving the Car of the Deceased?
There may be a period of time during which the registered owner of the car has passed away, but the car ownership has not yet been transferred. During this time, you may drive the car of the deceased provided that:
- The road tax has been paid up; and
- Motor insurance is taken out in the name of the estate of the deceased.
Otherwise, you may be liable for the following offences:
- Driving without valid road tax – The maximum punishment for this is a fine of $2,000.
- Driving without valid motor insurance coverage – The maximum punishment for this is a fine of $1,000 and/or an imprisonment term of 3 months. You will also be disqualified from holding a driving license for at least 12 months.
How Do I Sell the Deceased’s Car?
Upon transfer of ownership, the new owner of the car can now sell the car. Readers can list their car up for sale on the newspapers or online car classifieds.
However, note that pursuant to the transfer, the headcount of the owners for the vehicle will increase. This headcount indicates the number of people that have owned the car, which includes previous owners and the current owner.
For example, an increase in headcount would mean that if the deceased owner had been the second owner of the car, the new owner will become the third owner of the car.
Typically, cars with a higher ownership count tend to be valued at a lower amount compared to cars with a lower headcount.
If you are concerned with the valuation of the car due to the increased ownership count, you may wish to sell the car directly to a dealer via the Temporary Transfer of Vehicle Scheme.
This process may be completed online via LTALink using your Electronic Service Agent (ESA) account. This scheme will ensure that the ownership count is not increased.
The Temporary Transfer of Vehicle Scheme is beneficial if you wish to sell the deceased’s car at the outset, instead of driving the car for your own purposes.
How Do I De-Register the Deceased’s Car?
Another option one may consider is to de-register the car. This is because a pro-rated rebate may be granted when a car is de-registered before the expiry date of its COE.
As the rebate will be granted to the owner of the de-registered car, the car ownership must first be transferred to the new owner in order to receive this rebate.
The rebate will be based on the QP or Prevailing Quota Premium (PQP) that the deceased had paid to obtain the COE, where applicable.
There are several options for de-registration and disposal of the car:
- Scrap the deregistered vehicle at an LTA Appointed Scrapyard;
- Temporary storage at an LTA Appointed Export Processing Zone pending export; or
- Immediately export the car outside of Singapore.
Proof of disposal of the de-registered vehicle be must be submitted to the LTA within a month from the date of de-registration.
Otherwise, you may be charged for possessing a de-registered car for a fine of $2,000 and/or an imprisonment term of 3 months.
If you are a repeat offender, the maximum punishment is a fine of $5,000 and/or an imprisonment term of 6 months.
Note that if you wish to move the de-registered vehicle for disposal, you cannot drive it. Driving it may expose you to a fine of up to $1,000 or an imprisonment term of 3 months. You may also be disqualified from driving, for at least a year.
To avoid this, you wish to tow or transport the car, in order to dispose it.
Motor dealers are able to offer assistance in the de-registration and disposal process. LTA recommends motor dealers who are CaseTrust-SVTA accredited to avoid unnecessary problems in the de-registration process.
In an unfortunate event of a death, thinking about what to do with the deceased’s vehicle may be the last thing on your mind.
Nevertheless, it is important to know the necessary steps to take depending on what you eventually choose to do with the vehicle.
If you require additional assistance as to probate matters, feel free to approach one of our probate lawyers.
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