ok, basically, a person's estate does not have to go through probate in California if it is less than $100,000. If your grandpa's estate is going to go through probate, the car title will have to be transfered as a part of the probate process. Otherwise, DMV allows for title of the car to be transferred following these instructions: http://www.dmv.ca.gov/pubs/brochures/howto/htvr2.htm
In other words, title on the car needs to take place. Take care of this immediately. If the estate is not going through probate, do it following those instructions.
As for insurance coverage, car insurance follows the car, not the driver. When you get auto insurance, you tell them who will be the primary driver, how many miles it is driven in a year, where the car is parked overnight, whether it is used for business purposes, etc. All of these things go into the insurance rate, and as long as those things haven't changed, you would ordinarily be covered no matter what. If those things have changed, however, you need to get new insurance. This also connects and goes back to what I had written about getting title transferred---there are things that need to be done here.
As for refinancing the loan or transferring the loan on the vehicle, there's not a lot that can be done there---there's no law that says any bank has to loan you money (at least, not under these circumstances).
So, the good news is that title and insurance can be cured relatively easily. The bad news, I suppose, is that the banks do not have to give you a loan to cover the remaining balance on the car. Best of luck.
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