Finance managers at car dealerships sometimes refer to it as part of “fully protecting” an auto loan when they speak with borrowers including those with damaged credit. That description is fairly accurate and before making a decision consumers should have a basic understanding of how credit disability insurance works.
Finance managers have been known to present the product to problem credit buyers as “protecting an auto loan” which is actually a fairly accurate description. But the fact remains that credit-challenged borrowers, in particular, should have a basic understanding of how credit life insurance works.
Here at Auto Credit Express we’ve always felt that a service contract was one of the better dealer backend products for borrowers with problem credit, especially if they’re financing a used car with a high-risk auto loan. But a recent article from the Service Contract Industry Council which includes a number buying tips also points out another reason why purchasing one might be a good idea.
A program offered for the past two years by Mazda dealers could help car buyers with questionable credit who receive a loan approval through one of them save money on routine car maintenance.
Consumers with problem credit should know what could happen before they respond to a phone call or email from what might turn out to be a fraudulent company attempting to sell them a new or used car service contract.
It is a fact that used car buyers with problem credit as well as traditional borrowers with good credit that have, at least in the past, been contacted by call centers fradulently representing themselves as used car warranty companies.
We know that borrowers, especially those with bad credit on tight budgets and financing their vehicle with a higher-risk auto loan, are particularly at risk for unforeseen vehicle expenses in situations that could typically be helped by either a new or used car service contract.