What if I took out a payment plan to buy a sandwich, gave the sandwich to a homeless man, and then died without finishing all the payments? You say the homeless man should be obligated to give up the sandwich??
If the dealer has a lien against the title of the car, then yes, you give back that car when the order to repossess is issued.
You think the lien is cleared because the debtor passed away? It doesn't work like that. The ownership of the car is based on a transfer of title, and though you may be driving the car, possession is "only 9/10" of the law. If the title is not in your name, then it is not your car. You're just driving it.
Such cases I'm fairly certain that it's actually the title that says who owns the car. If you gave a homeless man a sandwich, paid for with a credit card, and then you died owing money on that card, then yes, that man probably has clear title to keep the sandwich.
(But hypothetically if you do, and it was simply processed as a regular card transaction, would the credit card company potentially have any claim on the title?)
I did not know the difference between a secured and an unsecured loan and that explains a lot. Cases of fraud or bankruptcy are really what I'm mainly talking about.
In most cases where the actual estate is not in the red, the estate will pay the debt and nothing should get repo'ed. If there were a lot of gifts made and cash transferred shortly before the person died, and now the estate is broke, then someone from the creditors' side is likely to seek more information about it, and exercise clawback opportunities.