vinyl siding over cedar

I currently have cedar siding on my house. We have had two contractors come out to give estimates on viynl siding and they both recommended to keep the existing cedar as opposed to tearing it off. The old cedar in some areas has started to pop or bow out a little bit. The contractors say they will go along and screw the old cedar down before putting up insulation and finally the viynl siding. They state it acts as a good insulator. I am concerned that the old cedar siding will continue to pop and potentially ruin the new vinyl siding that is put over it. What should I do? thanks.