5 Major Drawbacks of Buying Car Insurance from Your Dealer

Posted on: Feb 25, 2022 | | Written by:

5 Major Drawbacks of Buying Car Insurance from Your Dealer

Published on February 25, 2022. EST READ TIME: 3 minutes

It is a common practice followed by car dealers in India to combine insurance with car costs. To drive the car out of the showroom, you need mandatory third party insurance, and when it is provided by the dealer; it seems hassle-free and saves time. Most car dealers have tie-ups with insurance companies and the customers get little choice if they choose to buy insurance from the dealer. However, if you buy car insurance online, you get to compare plans and customize your car insurance as per your requirements. It may also save a lot of money.

Let us see the drawbacks of buying car insurance from your dealer

1. No comparison of plans:

Comparing various insurance plans has just become a matter of a few clicks. You can choose the cover you need and leave the plans that don’t fit your requirements. But if you buy insurance from your dealer, remember that your dealer sells cars and not insurance. Car dealers have tie-ups with insurance companies and only offer plans from these companies.

Hence, you get limited choices with no chance to compare all the plans available for your budget and needs. When you don’t explore, you may miss the best coverage available in the market.

2. No flexibility of customization:

Most digital insurance companies let you customize plans. You get to choose the insurer and the coverage you want. You don't get this flexibility when you buy insurance from your dealer. You may not get the insurer and the add-ons you want.

On the other hand, the add-ons offered may be unnecessary and cost you a higher premium. Most of the time, the plans offered are pre-designed and you don't have much say. Most first-time car buyers fall into this trap due to a lack of knowledge about car insurance.

3. Predetermined coverage:

Dealers usually offer predetermined coverage as per the insurance company they have tied up with. This is a general coverage not specific to your requirements. It may not have the inclusions you are looking for or it may have extra features which you do not need. If you buy car insurance online, you get to choose the inclusions and features you want in your plan and you pay only for what you choose and need.

4. Specific plans with limited add-ons:

A predetermined coverage means a fixed range of add-ons, which can be both insufficient or unnecessary. In either situation, the car buyer is at loss, he gets less coverage or pays more than required.

Getting appropriate coverage is the prime objective of buying insurance. If you are not getting the coverage you need, it beats the purpose of buying insurance and is a waste of your money.

5. Missing out on the benefits offered by digital insurance plans:

If you buy car insurance from your dealer, you miss out on a lot of features offered by digital-first insurers. When you buy car insurance online, it helps you not in just comparison but also in understanding various terms and conditions of an insurance plan. You don't get all the benefits of digital insurance. These are the features and benefits not to be missed. Let us have a look at what are these benefits.

Benefits of buying car insurance online:

If you buy car insurance online, you get a number of benefits at a very reasonable cost because insurance company also save a lot of money on administrative costs, which gets passed on to the customers.

● A large number of choices are available online.

● You choose the coverage as per your requirements and budget by comparing plans.

● Free from any influences or biases.

● No compulsions to choose any rider. You can choose what you want according to your needs.

● You can save up to 40% if you buy insurance online. You get desired coverage at a much lower price.

● Fast and easy claim settlement.

● Minimal paperwork is required.

● A quick and transparent buying process.

● You can make a decision based on customer reviews and experiences which you don't get when you buy from car dealers.

Tips to find the “RIGHT” insurance coverage for your car:

1. Compare the features of various insurance plans before investing your hard-earned money. Compare the policy offered by your dealer with other plans available in the market.

2. Compare the costs of these plans vis-a-vis the benefits.

3. Choose the add-ons wisely. Some important add-ons to add with your comprehensive insurance plan are zero depreciation cover, roadside assistance, consumables cover, and NCB protector.

4. Check the claim settlement ratio and how quick is the claim settlement process.

Conclusion:

As a car buyer, you invest your savings in your car. How you want to secure it should be your choice and not your car dealers. Do your research before you finalize your car insurance policy. Don’t let your car dealer influence you. Take your time and make an informed decision. The decision whether you want to buy car insurance online or from your car dealer should be backed by proper research and not convenience or any fear.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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