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We're the Consumer Financial Protection Bureau (CFPB), a U.S. government agency that makes sure banks, lenders, and other financial companies treat you fairly.

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Am I required to purchase credit insurance from a lender or dealer to get an auto loan?

Answer:

No, generally you cannot be required to buy credit insurance. Lenders cannot deny you credit if you refuse to buy optional credit insurance. If you feel pressured to buy credit insurance, walk away and consider looking for a different dealer or lender.

If a lender or dealer denies you credit because you refuse to buy any optional products like credit insurance you may want to submit a complaint with the CFPB. In addition to filing a complaint with the CFPB, you can also file a complaint with the Federal Trade Commission (FTC). You can also file a complaint your state attorney general or state consumer protection office. If you’re in the military, you should report this to your installation JAG immediately. To find your JAG Legal Assistance Office use the locator.

Credit insurance is usually expensive and you may be able to accomplish the same goal by obtaining other insurance coverage, such as life insurance. Other coverage may be cheaper and provide you with more flexibility by allowing you to pay off more than just the amount of your auto loan. Before you sign any loan papers, ask the lender whether the loan includes any charges for credit insurance.

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The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.

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