Car purchase is an exciting prospect. When you are looking to buy a new car, you will also be reading up about the various car insurance policies in the market. It is mandatory to have valid car insurance but, not mandatory to buy the same from your car dealer. Buying car insurance is mandatory under the motor vehicle act, 1988. With the help of the internet, it has become very easy to compare different insurance plans online and buy the best suitable as per your requirements.
No doubt there are a few more advantages of buying it via dealer:
The entire process of insurance purchase is streamlined and more convenient when it is through a dealer.
Many insurance companies have a direct tie up with car dealers who help them sell the policies at discount rate.
You can directly get in touch with the car dealer at the time of claims, as they have a dedicated help desk to handle insurance related claims and queries.
Some of the disadvantages are:
When you buy insurance from a dealer, you don’t get to compare plans by various insurers. It’s important to compare various car plans to ensure you get the best coverage at an affordable price.
A dealer’s primary job is to sell cars and not insurance. So, he won’t be able to offer you too many options when it comes to insurance. If he has a tie-up with two or three insurance companies, so he will be able to offer policies only by those companies. And this will limit you from selecting the best option that you can avail by doing your own research.
While it is generally hassle-free to get your insurance done with your dealer, it will be an expensive decision compared to car insurance policies available online. This is because insurance companies offer dealers a commission on every auto insurance sale. Since dealers aren’t licensed insurance agents, they do not sufficiently explain the policy. A quick comparison of policies available online could easily save you the 10-20% that dealers get as commission.
If you are looking at purchasing the policy that your car dealer is offering, find out about the add-on covers, terms and conditions and compare them with the offerings provided by other insurance companies.
— Its important to go through the break-up carefully and note the insured depreciated value (IDV) of a vehicle. IDV is the value the insurer will pay if your vehicle is completely damaged or stolen and could differ across insurers. Choose the IDV that best represents the value of your vehicle.
— While buying a comprehensive cover, take note of add-ons such as a zero depreciation cover, road side assistance cover, engine protection cover and a consumables cover.
–There will be a variation in premiums when you buy a comprehensive motor insurance policy instead of just a third party cover. A comprehensive policy throws in other covers such as own-damage that insures your vehicle against theft or damage, and passenger cover that insures the lives of the passengers. While the premium difference is stark when you opt for a comprehensive policy as against the mandatory third party policy, there may be a difference in premiums even between comprehensive policies from different insurers due to the underwriting practices of the insurer and any add-on covers.
Conclusion
Your dealer may induce the fear of losing out the benefits if you don’t buy insurance instantly from them, but don’t fall for it. You can get back to the dealer, agent, broker or the insurance company after doing a thorough research and make an informed decision.
