How to know if credit life insurance should be part of your  bad credit auto loan

Our experience

If you're applying for terrible credit auto loans you may be wondering if you have to buy credit life insurance, as well.

We understand your confusion because we've been involved with bad credit auto sales for nearly nineteen years at Auto Credit Express. In those years, we've managed to secure loan approvals for hundreds of buyers for a bad credit car.

We can tell you that a tote the note dealer won't help your credit scores and we explain the loan process to reduce your chances of repossession. Buyers outside our retail areas can also fill out our online auto loans application to find an appropriate dealer in their area.

But once you get an approval, there are other choices you'll have to make.

Credit life

Credit life insurance is essentially decreasing term life insurance.

Term insurance is a type of insurance that covers a fixed period and cannot be renewed. Unlike a whole life policy, it builds no cash value.

Decreasing term means that the payout amount matches whatever the loan balance is at any point during the loan. As the loan is paid off, the amount owed decreases and the amount of insurance covering the loan decreases to match the loan balance.

How and when to buy

If you want credit life on your bad credit auto loan you have to buy it at the time the loan begins. The monthly premium amount is based on the beginning loan balance and the cost is rolled into the finance contract and added to the monthly car payment.

Advantages and disadvantages

Like credit disability insurance, you have to decide whether credit life insurance is worth the cost. Here are some facts:


1.    Peace of mind – the insurance will pay off the loan and your estate won't be responsible for the remaining balance if you should die before the loan is paid off
2.    One payment – the insurance premium becomes part of your car payment, so there is no separate note you'll need to pay.


1.    Cost – typically, credit life insurance is usually more expensive than an individual term life insurance policy for the loan amount.
2.    Interest payments – because it's part of a loan, you pay interest on the policy balance every month.
3.    If you're single - if there is no loan co-signer and you're single, even if you were to die your family is not legally responsible for paying off the loan.

As we see it

The decision to choose credit life insurance for poor credit car loans is one you have to make. If you have a family or co-signer, and you're worried they might not be able to continue making the loan payments, you might want to determine the costs of an individual term life insurance policy before signing up for credit life.

One other thing: Auto Credit Express has helped thousands of people with bad credit buy a car and establish their auto credit at the same time through a network of affiliate dealers that specializes in poor credit auto loans.

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