Ohhh No NO NO You are making a horrible mistake, PLEASE don't listen to some of these people.
If you tell them you aren't going to pay( they won't care) they can and most likely will sue you for a judgment. You're debt falls into prime territory of over $1000 if which they will pursue a court awarded judgment. Do you know what that means? They will seize your bank account, wage garnishment etc. A judgment will be placed on your credit report for up to 10 years. It will destroy your credit report.
Now please listen to someone who has gone to hell and back with debt and with collectors. It sounds like you tried to get a PFD and it didn't work, They are extremely hard to get.
It sounds like you have the means to pay it off in Full, now the debt collector was right. Paid will look better in the eyes of future lenders than settled . You don't have to take my word or anyone else's word on this go to your local car dealership and ask them or your local bank ask them. They are they ones who wil be looking and judging your credit report.
You got confused and I'm surprised nobody caught on to this. If you pay your collection account it only restarts your States Statute of Limitations clock, NOT your Credit Report clock. If it is going to fall off your credit report in 2 years than it will. And since you are planning to pay the debt it doesn't matter if the Statute of LImitations begins again because the debt is paid off. If you don't pay the debt just because it's scheduled to fall of your credit report doesn't mean it goes away. They will still try to collect on your debt. And if you tell them well " I"m not going to pay you" You just put your account on the fast track to Court in their eyes.
Tell some of these posters what great advice they gave you when you have a summons brought to your house to go to court and a judgment gets rendered against you.
Oh Lord, if you have the means pay the debt and get it out of your life. Don't listen to some of these people they directing you down the wrong path and you are going to end up paying twice of what you owe now. Yes they wil continue to charge interest and court fees. Your $1000+ debt is ripe for the picking with these debt collectors to sue.
Oh my God I can't believe some of the advice give on this board.