Final answer:
It is true that you must carry collision insurance on a financed vehicle until it is paid off to protect the lender's interest in the car.
Step-by-step explanation:
The statement is true: if you finance the cost of a vehicle, you are indeed required to carry collision insurance until it is fully paid off. This requirement is put in place by lenders to ensure that their financial interest in the vehicle is protected in case of an accident that results in damage to the car.
Car insurance is an essential part of automobile ownership and is frequently mandated by law. It protects you from shouldering significant out-of-pocket costs if your car is involved in an accident or suffers damage. The premium for insurance, which can be paid in various installments such as monthly or quarterly, ensures that the insurance company can cover the costs of accidents for all the insured drivers.