Q: Do I have to purchase credit insurance to get a car loan?

  • A:Possibly. Some dealers and lenders may ask you to buy credit insurance to pay off your loan if you die or become disabled. Before you buy credit insurance, consider the cost, and whether it’s worthwhile. Check your existing policies to avoid duplicating benefits.

    Credit insurance isn’t required by federal law. If your dealer requires you to buy credit insurance for car financing, it must be included in the cost of credit. That is, it must be reflected in the APR. Your state Attorney General also may have requirements about credit insurance. Check with your state Insurance Commissioner or state consumer protection agency.

Q: Doesn’t a service contract cover the same items as a warranty?

  • A:Service contracts