Credit life insurance on an auto loan pays off some or all of the loan if you die, and it is optional: you generally cannot be required to buy it to get the loan, and if you add it, its cost is usually financed, so you pay interest on it too. The CFPB says on its credit insurance page that you can cancel these products and may be entitled to a refund if you sell, refinance or pay off the loan early.
What credit insurance covers
The CFPB lists four types: credit life, credit disability (also called accident and health), involuntary unemployment and credit property insurance. Credit life is the one tied to death. The federal HelpWithMyBank site notes that some policies combine credit life and disability and that the premium may be added to the loan principal.
The signature rule
Under Regulation Z, 12 CFR 1026.4(d)(1), a lender can leave credit life premiums out of the finance charge only if the coverage is not required and that is disclosed in writing, the premium is disclosed in writing, and you sign or initial a written request for it after getting those disclosures. If you did not ask for it, do not sign that box.
If a lender says it is required
The CFPB says on its optional products page to ask the lender to show you where the contract says the product is required, and that you can walk away and file a complaint if you are pressured. Our dealer add-on products guide covers other extras that show up in the same paperwork.
Credit life or GAP
Credit life pays the loan if you die; GAP covers the difference between the loan and the car's value after a total loss or theft. They protect against different events. Our GAP versus credit life guide compares them side by side.
A quick cost check
Ask the dealer for the premium in dollars and how much it adds to the amount financed. Then ask what the same coverage would cost as a term life policy from your own insurer. If the premium is financed, you also pay interest on it for the whole loan, so the true cost is higher than the line on the contract.
If you already bought it
Find the certificate or policy in your loan papers and read the cancellation section. Ask the lender or the insurer in writing how to cancel and how the refund will be figured, and whether it is credited to the loan or paid to you. Keep a copy of the request and the date you sent it.
Reading the history report
Read the title section first: any salvage, rebuilt, flood or lemon brand changes the value more than anything else. Then line up the odometer readings by date and look for gaps or drops. Check the number of owners and the states where the car was registered. An approved NMVTIS check adds insurer and salvage-yard records. Our odometer discrepancy guide explains odd mileage entries.
Paperwork to keep
Keep the buyer's order, the retail installment contract, the odometer statement, any Buyers Guide, warranty or service-contract papers and every payoff or lien letter in one folder. Photograph the window sticker and the dash mileage on the day you sign. If a dispute comes up later, dated paperwork is what a lender, an insurer, a dealer licensing agency or a court will ask for first.
Compare the financing
Get a preapproval from a bank or credit union before you visit, so you can compare it with the dealer offer on the same term. Compare the APR, the amount financed and the total interest, not just the monthly payment. The CFPB auto loan tools walk through what to read on an offer. Decide on add-ons such as GAP and service contracts on their own merits, and get the price of each one in writing.
What the report costs
As of early November 2026 a CARFAX bought direct usually costs around $44.99, and AutoCheck sits a little lower. We are a licensed CARFAX and AutoCheck reseller, not affiliated with CARFAX, AutoCheck or Experian. Our guest price has been about $5.50 a report, about $4.50 for members, and about $6.75 for a CARFAX and AutoCheck bundle. Confirm the price at checkout, since it can change.
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