Can You Buy Car Insurance From Car Dealership
Synopsis
Buying car insurance through the dealer saves time but may come with its negatives. Let's see the pros and cons of buying car insurance from a car dealer.
With car loans available easily, owning a car has already become an effortless affair. However, taking your prized possession out of the showroom on to the roads has to wait unless the car is insured.
Since long, car dealers have been offering insurance to buyers through a tie-up with the insurance company. Buying car insurance through the dealer itself saves time but may also come with its negatives. Let's see what are the pros and cons of buying car insurance from a car dealer.
Advantages
The process of buying car insurance from the car dealer itself will certainly save a lot of time. Otherwise, one would have to get in touch with other insurers, seek their premium figures and then decide. Here are few other advantages:
o The entire process of insurance purchase is streamlined and more convenient when it is done through a dealership.
o As the car purchase and insurance gets bundled, the buyer may receive bundling discounts on the deal. Some car dealers may waive off the first year premium, thus sweetening the deal further.
o In case one needs to go for add-ons, the dealer will be able to offer them too. In addition, few other services may also be bundled from the dealer's end.
o Most such dealers have a separate helpdesk for insurance queries and claim assistance that may be of help at the time of need.
Disadvantages
Buying insurance from a dealership has its own disadvantages:
o In some cases, the dealers have their own pre-packaged policy with lots of features thrown-in. Not all of them could be required but still one has to pay a higher than regular premium in order to get the car insured through the dealer.
o The car dealer will have tie-ups with specific insurance companies. As a customer you will be able to purchase the insurance solutions provided by these companies only.
o The car dealer may not offer the best price on insurance. So, while customers save a lot of time through this purchase, they may not really save money. Car dealers work with insurance providers on a commission basis. So, the customer may be required to pay higher premiums than what they would pay if the insurance was purchased through another mode.
o The process of buying car insurance from a dealer does not give you the opportunity to compare plans between insurers. This is, in fact, a crucial step in the process of deciding on an insurance policy.
o Dealerships may include voluntary excesses or add-on covers under your auto insurance policy without specifically highlighting it. You should be alert and read through the policy coverage carefully before signing on the dotted line. In case your policy has a high value for voluntary excess, you will be required to pay a large part of the claim amount. Having add-on coverage that is not useful to you will only result in an increase in the premium you pay, without any other benefits.
Regulatory take
In January 2018, the Insurance Regulatory Development Authority of Indian (IRDAI) had taken note of the influence of car manufacturers and the car dealers who were selling insurance and came out with this ruling - "It is reported that the Original Equipment Manufacturers- OEM's are exercising undue influence both on the insurance intermediary and the automobiles dealer who have become (Motor Insurance Service Provider (MISP) without having corresponding accountability for their actions." The regulator added, "In order to ensure that MISP guidelines work in the interest of the customers, it is advised that no MISP or the insurance intermediary can enter into an agreement with the OEM which has an influence or bearing on the sale of motor insurance policies." The move helps in bringing transparency and accountability thus befitting the buyers.
What you should do
At the showroom, the entire process of buying the car may take 2-3 days. In the meantime, explore other insurers and modes of buying including online buying. Work out the numbers post discount and see what works best for you in terms of saving time and money too.
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Can You Buy Car Insurance From Car Dealership
Source: https://m.economictimes.com/wealth/insure/pros-and-cons-of-buying-motor-insurance-from-a-car-dealer/articleshow/67285904.cms