What is Automobile Credit Insurance?

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The next time you purchase a car in the state of Texas you may be given a quote for automobile credit insurance. You may be thinking about how you already have automobile insurance and wondering why you might need auto credit insurance but it may be something you should seriously consider. Here’s why.

Understanding Automobile Credit Insurance

When you purchase an automobile insurance policy for your vehicle you are paying for two things: liability and property damage coverage. The liability coverage will pay for medical bills and property damage you cause to another person if an accident is considered your fault. Property damage coverages, like comprehensive and collision, are used to pay for the damage to your own vehicle.

The problem is that comprehensive and collision coverage will only pay for damage to your vehicle up to the Kelly Blue Book value of your car. In many instances, a car depreciates much faster than you are able to pay down your vehicle loan. For example, this means you could be driving a car worth $15,000 but still owe $21,000.

Texas Union automobile credit insurance is designed to protect you from having to pay the balance of that loan ($6,000 in the above example) out of pocket if something should happen to your vehicle.

Considerations before Purchasing Automobile Credit Insurance

There are a few things you should keep in mind before you agree to the auto credit insurance quotes in Texas. They include:

  • The cost of the auto credit insurance. Can you afford it?
  • Will the auto credit insurance costs be included in your loan?
  • Will the interest rate for auto credit insurance be the same or lower than the interest rate for your vehicle loan?
  • Will the insurance last until the end of your car loan, or is there a shortened policy period?
  • Can you receive a refund if you cancel the auto credit insurance?

You may want to shop around before accepting the auto credit insurance quote your Texas car dealer offers you at the time you sign your loan documents. There are several different automobile credit insurance companies on the market and each will have different rates and payment plans. Your dealer wants to sell you auto credit insurance because he makes a commission and because he wants to secure the value of the loan he’s about to put through. That does not mean you’re obligated to make a purchase from him – no matter what he says.

Our site is designed to help you find the best automobile insurance and auto credit insurance quotes in the Texas Union. Trust us to help you find the best coverage at the most affordable prices.

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