Many people have this dream of buying a car and availing a car loan to make the purchase. Just buying a car is not enough. You must insure it with a car insurance plan. Car insurance has two important components: Own-damage Cover and Third-party Liability Cover.
Own-damage Cover offers protection against theft or damage to the vehicle and third-party liability insurance covers the damages caused to the property of a third person or injury/death of an unrelated party in an accident. Availing of a Third-party Cover is mandatory in India and no vehicle owner dares miss this cover.
Now, many car dealers offer car insurance to customers by bundling it along with the car. This is done because car dealers have a tie-up with the insurance companies and sell insurance to make good profits.
A lot of car buyers opt for the insurance offered by the car dealer, believing it to be the easier choice. Look for the best deals on car insurance across the market, before locking on the deal. So, before you buy car insurance from a car dealer, check its pros and cons.
Why Availing Insurance From a Car Dealer is Not a Good Idea?
1. There are Limited Options
Selling automobiles, not auto insurance, is the primary responsibility of auto dealers. However, dealers now also provide auto insurance coverage in addition to the vehicle they are selling (Bundled Plans). Due to the auto dealer’s affiliation with only two or three insurers, this insurance plan has a limited selection of providers. Dealers will only be permitted to offer insurance to insurers that they have agreements with. Such plans are subject to a number of restrictions.
2. High Premiums
In order to sell auto insurance together with the vehicle, car dealers typically enter into business partnerships and other alliances with insurance firms. In addition to determining the policy premiums, insurers also make important decisions regarding service and claims. These are distributed to auto dealers as a variety of costs. The customer will be required to pay a high premium as a result, which will affect the cost of the policy.
3. Limited Add-Ons
Add-ons for auto insurance include things like engine protection cover, return to invoice and zero depreciation. These accessories must be picked while keeping in mind the car’s and its owner’s unique needs.
However, the extras included in the bundled auto insurance policies sold by dealers don’t fit the needs or usage of the automobile owner. Dealers push the add-ons for bigger profits since they receive commissions for the policies they sell. If you purchase add-ons from dealers, they will cost you a lot because they don’t provide discounts.
Interested in learning more about auto insurance? You can rely on IndianMoney.com to make it simple for you. In order to prevent you from being misled when purchasing any type of financial product, we only offer FREE financial advice and education.
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