Here are the freebies you usually get when you buy a car: Free vehicle service for a certain period of time. Hassle free repairs in case the vehicle is damaged as a result of any accident. You can also avail value-added services: Many dealers provide financing facilities and motor insurance coverage by tying up with banks, non-banking financial companies and insurers. While all these can provide you a smooth car buying experience, you must be careful while choosing a motor insurance policy. Here are the advantages and disadvantages of buying a policy from a car dealer.
Facility: You can get your car and vehicle insurance at one place. You don’t have to go through the hassle of finding an insurance provider.
Customization: A car dealer will likely know about your vehicle and its specifications. They can help you get the right insurance policy for your car. Apart from this, you can get personalized service from the car dealers, which includes assistance on insurance claims and other related services. “Car dealers can offer customized insurance policies that suit your specific needs, such as zero depreciation cover, engine protection and roadside assistance,” said Gopakumar Pillai, head of automotive partnerships at Digit Insurance.
limited options: Car dealers usually offer limited insurance policies. Some may not even allow you to compare policies from different providers. ‘When you buy insurance from a car dealer, you may not get the option to compare and choose from different products,’ Pillai said.
Raghavendra Rao, chief distribution officer, Future Generali India Insurance, said, “The price and cover comparison may offer multiple insurers options, which may not be available with all car dealers. This limits the flexibility that customers should have while purchasing/renewing their motor insurance.”
high premium: Car dealers usually charge high commission on insurance policies. Rakesh Goyal, director, Probus Insurance Brokers, said, “Car dealers have a financial incentive to sell you motor insurance, which can create a conflict of interest. They may prioritize their profit over your best interests.”
lack of transparency: Car dealers may not provide complete information about their insurance policies. “You cannot get the advice that agents and other middlemen give you while buying insurance,” Rao said.
What to do? Check the offers of different insurance companies. Abhishek Bondia, Chief Officer and Managing Director, Secure Now said, “A car dealer is just like any other insurance intermediary. Buying insurance from a dealer is not mandatory, nor is there any economic benefit. In fact, it is advisable to compare rates with a trusted insurance advisor. Often, it is possible to get better insurance coverage and pricing from insurance consultants than from a car dealer.”
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