Why You Should Never Buy Insurance from Your Car Dealer?

Published On 18 Oct 2019 By InsuranceDekho

The car insurance policy offered by your car dealer might not be the best policy for you!

For a majority of people, buying their first car is a dream come true. However, buying a car for the first time is not a cakewalk. The process involves substantial research about technical features, brand reputation and most importantly the choice of car insurance plan which one must purchase.

A car insurance plan provides monetary protection against financial liabilities which may arise out of an accident or any other unfortunate incident involving the insured’s car. At a comprehensive level, there are two components of a car insurance policy - The third party cover and the own damage cover. As the names suggest, a third party cover insures policyholders against liability toward third parties and an own damage cover provides an insurance cover for damages incurred by the insured’s car.

Usually, car dealers try to sell a car insurance policy to customers with a car. They generally do so to serve the collaborations they have with several insurance companies. On successful sale of an insurance policy, the car dealers earn a profit for every policy sold. However, car buyers are not obliged to buy an insurance plan from the dealer and are free to explore available insurance plans themselves as per their requirements. In fact, it is always a better idea to compare multiple insurance plans yourself and then buy the best one. You can easily compare the policies yourself, that too instantly, at our platform InsuranceDekho.

Reasons Why You Should Never Buy Insurance from Your Car Dealer

Limited choices: The primary job of car dealers is to sell cars. But they also offer buyers insurance policies by bundling them with cars to make some extra money. It leads to limited offers because the dealers could have tied-ups with two or three or five insurance companies at maximum.

Inadequate Add-ons: A car insurance plan can be customised using add-ons. You can choose additional benefits like No depreciation add-on, Bumper-to-bumper cover etc. by paying a small extra premium. However, car dealers usually try to sell unnecessary add-ons too which can give them higher profits. This again makes you spend your money unnecessarily.

Costly Premiums: Car dealers in the market generally have tie-ups with insurance companies and they usually have a say in terms like premium amount, servicing and claims. In some cases, car dealers receive as high as 40% commission from an insurance company. This, in turn, influences the policy rates, which gets converted into high premiums.

Thus, we suggest you do a proper research about a car insurance policy by comparing it with other available plans in terms of premiums, claims settlement, add-ons and most importantly - the customer feedback and then make an informed decision.

For further reading:

5 Reasons Why Buying Car Insurance Online Is A Smart Choice

Disclaimer: This article is issued in general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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