Last Updated on: Feb 06, 2021
Purchasing additional insurance for your car loan may be a good idea; the question is often whether to go with the car dealership or your own insurance carrier. The answer is that is always good advice to talk with your agent if you plan to purchase a new or used car to see what kinds of insurance is available and to receive a quote before you go to the car lot. If you are wondering why you should do this, then reading this article will provide you with the answers.
After you choose a car to buy, you will go to the finance office to finish the paperwork. While hear the finance officer will ask you if you want to add disability, credit life, accident and health insurance to your car loan. All of these insurance will help pay your car loan payments if you are unable to pay due to becoming ill, injured, disabled, or in the case of your death. Too many individuals answer this question without a second thought. When you leave with the car, you will not be able to change your mind at a later date and have this added to the car loan.
If you told the finance officer, yes, then you will have this insurance but in the majority of cases, you will be paying more than you would if you went through an insurance company. The dealership has a deal with an insurance company to have their customers add their insurance to the car loan. The dealership receives money for doing this and you will be the one paying this extra fee.
If you told the finance officer, no, then you may not have the coverage you need in the case of your disability or injury. All car loans require full coverage insurance but this insurance will not cover the car loan payments. IF you are unable to make your payments, the loan company will repossess your car if you do not have additional insurance that will cover the loan.
You can see that this extra insurance coverage is important but you should always talk with your insurance company to ensure you get the best rates. The costs between the insurance company and the dealership can be hundreds of dollars. The good news is that if you check with your insurance company you may be able to afford all the additional insurance whereas with the car dealership you may not be able to afford even one of the additional coverages.
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