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Do I need that extra payment protection?


I have bought a new (used) car and I think at the moment when the loan was being set. I signed up for the disability protection program wherein it says that it will cover for a certain amt for a certain time. When the statement comes, I see that I am paying abt $65 every month and it is decreasing but still i end up paying > $650 a year. Is it really worth it? They have an option to cancel (its business for them) but I want to know your thoughts?


It’s probably a really bad deal, financially speaking. If you went to your employer or a private disability insurance company you could probably get a lot more coverage for $65/month.

Generally unnecessary. Sick leave and (depending on why you’re disabled) workers comp will pay the bills, including the car note - certainly long enough for you to sell it if it’s going to get you in trouble.

If you are in good health and don’t work in a high danger job, you don’t need it.

I wouldn’t have bought it.

Those insurance policies are not well regulated and are far too expensive.  It is a big profit maker for whoever sells it.  If you went to your insurance company chances are they could offer you a policy for far less.  

After that, you need to make up your own mind.  

 [b] I really love the fact that you are in effect paying for an insurance policy to make sure your payments get paid so the credit company does not suffer a loss. [/b]

Joseph Meehan wrote:

I really love the fact that you are in effect paying for an insurance
policy to make sure your payments get paid so the credit company does
not suffer a loss.

Years ago, when my wife and I bought our first car, the bank talked us into buying a similar policy. We quickly learned it was for their protection. If anything happened to us, the bank would not need to stand in line behind all the other creditors to collect their money. We were paying extra each month just so the bank could go to the front of the line to get paid.

I’m almost ashamed to write how I once fell for that.

Everyone makes mistakes. You only need to be ashamed if you continued to fall for that line.

Hi Joseph,

I think I fell for it… I was checking my payment grid and this charge appeared and wanted to clarify it with the bank. They did explain and said that it can be removed anytime I desired. Is that true? some online articles do say that it you have to make a decision within a certain time frame. Based on the above replies to the thread, I have an inclination to remove it.


If you’re disabled, let them take the car back. You’re not going to get worker’s comp unless you’re injured on the job. If you’re driving the car for the job (other than commuting) and the insurance company doesn’t know about it (and therefore hasn’t charged you extra) you will get precisely nothing.

My suggestion would be to change insurance companies.

Some interesting advice above. Workers comp and sick time don’t pay your bills for you, they will only give you a percentage of your regular income. Letting your car become repossessed will destroy your credit rating.
Is this a good deal? Depends on alot of things, but mainly on the likelihood of your becoming disabled, for how long, and how long before the policy pays (ex. 3 mo waiting?). You need to weigh the details vs. the odds.
As for private disability, depends on your medical history. I doubt I could buy private disability at any price, and my employer offers pretty short coverage.
In most cases these policies are a waste of money though.

Perhaps I was unclear. Worker’s comp will pay you a percentage of your regular income. You will then take that money and pay your bills.

And sick leave pays 100% of your income, but generally only lasts 2 weeks or so a year.

You can take up to 12 weeks for sick leave, but pays $0. Of course you can take sick days and/or vacation days, IF you have any. Many people don’t get sick days or vacation days, at least not two weeks’ worth.