Is it true that we’ll lose our credit?
We’ve been facing issues with our car, which has been out of commission for nearly a year. Frustrated by the $250 monthly payments, we decided to return the plates. We currently don’t have any other vehicle. When we contacted our insurance to cancel, they told us that if we get a new car, we would lose all our credit unless we pay an additional $200 to keep our policy on hold for six months.
Is this really the case? What does it mean to start over without any credit?
It sounds like you’re in a tough situation with your car and insurance. When your insurance company talks about losing credit, they might be referring to your insurance coverage or the discounts you have built up over time, which could be tied to your history with that insurer.
If you cancel your policy, your premium could go up if you decide to get a new policy later, as you might lose any loyalty discounts or good driver benefits. However, this doesn’t mean you would be starting “without credit” in the way of your credit score; it’s more about losing the benefits from your current insurance provider.
If you choose to keep the policy on hold by paying that $200, it may help maintain any credits or discounts you currently have, so it could be worth considering if you plan to get a car again soon.
If you are worried about your credit score itself, that is separate from your car insurance situation. As long as you keep up with your other bills and debts, your credit score should remain intact.
In short, check with your insurance provider for the specifics, and assess if the hold option makes sense for your situation. If finances are tight, consider looking into other insurance options as well.