diff --git a/selfdrive/pandad/pandad.py b/selfdrive/pandad/pandad.py
index 12accdbf5e..aebd00cc18 100755
--- a/selfdrive/pandad/pandad.py
+++ b/selfdrive/pandad/pandad.py
@@ -3,7 +3,9 @@
 import os
 import usb1
 import time
+import signal
 import subprocess
+import sys
 from typing import NoReturn
 
 from panda import Panda, PandaDFU, PandaProtocolMismatch, FW_PATH
@@ -62,12 +64,26 @@ def flash_panda(panda_serial: str) -> Panda:
 
 
 def main() -> NoReturn:
+  # override manager's immediate SystemExit to allow pandad to exit gracefully
+  do_exit = False
+
+  def signal_handler(signum, frame):
+    nonlocal do_exit, process
+    do_exit = True
+    cloudlog.warning(f"caught signal {signum}, exiting")
+    if process is not None:
+      process.terminate()
+
+    sys.exit(0)
+
+  signal.signal(signal.SIGTERM, signal_handler)
+
   count = 0
   first_run = True
   params = Params()
   no_internal_panda_count = 0
 
-  while True:
+  while not do_exit:
     try:
       count += 1
       cloudlog.event("pandad.flash_and_connect", count=count)
@@ -160,7 +176,8 @@ def main() -> NoReturn:
     # run pandad with all connected serials as arguments
     os.environ['MANAGER_DAEMON'] = 'pandad'
     os.chdir(os.path.join(BASEDIR, "selfdrive/pandad"))
-    subprocess.run(["./pandad", *panda_serials], check=True)
+    process = subprocess.Popen(["./pandad", *panda_serials])
+    process.wait()
 
 if __name__ == "__main__":
   main()