Understanding how credit disability insurance might benefit a bad credit auto loan

Car loans and you

Once you've received approved auto loans at a dealer you'll need to decide whether or not you need or want credit disability insurance.

We've often helped people with this decision because we've been in bad credit auto sales for almost twenty years here at Auto Credit Express.

Our web site also explains the terrible credit auto loans process so applicants can bypass a tote the note dealer and understand which choices they make might lead to repossession.

Credit disability insurance

Often called accident and health insurance, credit disability insurance is designed to cover your car payments if you become sick or injured and unable to work.

Depending on the policy, the waiting period for benefits to start can begin anywhere from 14 to 90 days from the date of your disability. Once this time has passed, the policy begins making your car payments. In most cases, but not always, benefits are retroactive to the first day of a disability. You also don't need to be permanently disabled in order to receive benefits.

If you decide you want it, you usually have to buy credit disability insurance at the time you take out your car loan. The monthly premiums are based on the amount financed and the type of coverage you choose. The cost is then added to the loan amount and included in your monthly payment.

Pros and cons

You have to decide for yourself if it's worth the cost. Here are some advantages and disadvantages:


1.    Peace of mind – your car payments will be covered if you become either temporarily or permanently disabled
2.    Easy pay – the insurance payment is rolled into your monthly car payment so there is no separate insurance premium to pay.


1.    Cost - in many cases, these policies can be more expensive than if you were to take out a separate disability policy for the loan amount.
2.    Interest expense – since it's part of the loan, you'll be paying interest on the policy charges every month – something you wouldn't have to do with a separate disability policy.

The Bottom Line

Whether you need credit disability insurance or not on your car loan contract is something only you can decide. But consider this: if a disability would seriously affect your chances of keeping your car, you might want to examine the costs versus benefits of this type of insurance.

At Auto Credit Express we help people with bad credit find a dealer for their best chance at getting approved for a bad credit car.

So if you are serious about getting your car credit back on track, you can begin the process now by filling out our secure online auto loans application.