Should You Buy Insurance From Dealership or On Your own? Here’s How to Find Out the Best Car Insurance Options

Should You Buy Insurance From Dealership or On Your own

Buying a car is a common aspiration and dream among all of us. With the pandemic still running the economy into the ground, the financing for that dream is not as simple as it used to be. To ensure that you are not affected by it and also to boost up car sales, companies and dealerships are offering a lot of different discounts and financial schemes. One of those is in the form of insurance for the vehicle you are buying. Insurance is an integral part of purchasing a new car as it has been made mandatory in India with the Motor Vehicles Act.

The benefit of having car insurance not only involves safeguarding your interest and peace of mind but also protects your car against any damages. In case of an accident where any third party is involved, the payment for the repairs will be taken care of by the insurance company. The insurance policy will also cover your hospitalisation charges in the unfortunate event of you getting injured during the accident.

There are 2 ways for you to buy insurance – from the dealership or from the insurance provider by yourself.  It might appear an easier path to simply buy the insurance from the dealership itself but with proper research and some effort from your side, you can save a lot of money if you look outside.

What to expect when buying Insurance through Dealership

When you are looking to buy a new car, you should always research the various car insurance policies available in the market. But when the car dealer makes it easy to buy a policy by bundling the insurance with the car sale, it will sound easier and simpler to just take it and get the whole process over with. However, before making any hasty decision, you should weigh out the pros and cons of purchasing insurance through the dealership.

Advantages

  • Buying insurance along with your car at the dealership will certainly save us a lot of time. It is because the dealerships have a ready knowledge of the procedure, terms and conditions of insurance policies and their purchase. They can also advise you on a plan that would suit you the most.
  • The entire process of insurance purchase is streamlined and more convenient when purchased through a dealership.
  • They might offer you discounts on the total price for the purchase of extras like insurance from the dealer. Some car dealers may even waive off the first year premium.
  • The customer will not have to approach an insurance company separately and go through their tiring procedures for their coverage needs.
  • The dealer will be able to clarify doubts and queries on the insurance coverage at all times. Such dealers have a separate helpdesk for insurance queries and claim assistance for that purpose only.

Disadvantages

  • Some car manufacturing companies tie-up with an insurance provider and control some aspects like the claims and servicing. Similarly, the car dealerships will also have tie-ups with specific insurance providers for the sale of their policies. The customer will be offered only that particular insurer as a choice. Whereas, if you are buying the policy online, you can have a variety of companies offering extensive coverage.
  • The dealership may not offer the best price on insurance. Even though it saves us a lot of time, we might not be saving a lot of money choosing to buy insurance through dealerships. Since the dealerships work with the insurance companies on a commission, the customer may end up paying higher premiums than what they would pay if the insurance was purchased directly.
  • Buying from dealerships does not offer you all the choices that are available in the market. You cannot compare the pros and cons of different plans that might offer you a better deal.
  • Dealerships may also include voluntary excesses or add-on covers in their pre-packaged policy with lots of features thrown-in without actually highlighting it. If you don’t read through the fine print of the document and understand the policy coverage, you will end up paying a large portion 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.

Regulations

In January 2018, the Insurance Regulatory Development Authority of India (IRDAI) noted the influence of car manufacturers and the car dealers selling insurance and declared the following –

“It is reported that the Original Equipment Manufacturers – OEM’s are exercising undue influence both on the insurance intermediary and the automobile dealer who have become (Motor Insurance Service Provider (MISP) without having corresponding accountability for their actions.” The regulator had also 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.”

This helped in transparency and accountability that will benefit the buyers.

Our Final Verdict:

Insurance agents have been the standard choice for the purchase of any insurance policy over the years. But with technology and demand from customers for instant gratification, the online mode of selling and buying insurance has become steadily popular recently. Anyone interested can browse from the comfort of their homes and obtain all the details for any insurance policy that suits their needs. It also helps us get them at a price that we will not get at a dealership as it cuts out the cost of operation that will be required if bought through an agent or dealer.

Most of all there is no tedious paperwork required and you can get them immediately on payment online. They can also be renewed and maintained easily online. The insurance providers also have options to continue the premium payments online securely leaving us with little to no work once we have bought it.

Seeing that time was the important factor that swayed us towards the dealerships, it is pretty clear that once we put in the initial effort to find out the plan that suits us best, there is essentially no time wasted by buying an insurance plan online for our car.

Also Read:

CORONAVIRUS TIMES; Renewing Your Car Insurance During the Pandemic

Comprehensive Car Insurance: Know Why it is Mandatory For Your Four-Wheeler

How to File a Car Insurance Claim Following an Accident

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