Should You Buy Car Insurance

By | April 23, 2024

Myth: As car insurance is mandatory, I have to buy it via car dealer !!

Reality: 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. As it is mandatory car dealers bundle up insurance with other services and quote it all to you in one invoice. But, insurance can be separated and you can choose an insurance company on your own. Most of the people buy it via a dealer, either because they are unaware of separating insurance from car purchase cost or they just seek convenience as getting it via dealer is much easier and convenient.

But, now the time has changed. 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. So, no question of hassling in the lengthy paper process. It is not like you should never buy car insurance via a dealer, there are disadvantages as well as advantages.

Advantages of buying car insurance from a dealer :

No doubt the process of buying insurance from a car dealer certainly saves you a lot of time. And 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.
  • You may receive bundling discounts on the purchase of the car and the insurance from the car dealer.
  • You can get in touch with the car dealer to get clarification on the coverage or at the time of claims. The dealer will efficiently assist you in such matters.

Disadvantages of buying car insurance from a dealer :

A very limited number of options: A dealer is there to sell the car 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.

Premiums can cost more: As buying car insurance via dealer will be offline so it’s very obvious that it will be costlier than what you can get from online mode. In spite of this, car dealers enter into tie-ups and arrangements with insurance companies for which they get the commission, which can go as high as 40%. This will have an impact on the policy price, and for you, this can translate into high premiums.

Add-ons offered may not fit your requirement: Car insurance add-ons must be chosen keeping in mind the specific requirements of the car and its owner. As car insurance premium is recurring cost, to attract more buyers, a dealer may provide you basic insurance plan which will be cheap but, even then if you compare the premium of the same plan online you will find it cheaper, eg. if insurance via dealer costs Rs. 25000, it will cost Rs. 15000 if bought online. (40% costlier).

The main intention of the car dealer is to earn extra by bundling up all for you in one basket. As insurance is the basic requirement for every car buyer, he may influence you to take insurance from him, which may be very basic insurance not having important add-ons required.

It must be noted that add-ons are extra covers that can be opted to enhance the protection offered by a basic car insurance plan. Knowledge about what add-ons are suitable is important. Few essential add-ons that can be included to the base plan are:

  1. #Zero or Nil Depreciation: This add-on offers complete coverage without factoring in the depreciation of parts like plastic, fiber, rubber, and glass.
  2. #Engine Protection Cover: This add-on cover provides protection against damage to the car’s engine due to water ingression leading to hydro-static lock.
  3. #Roadside Assistance Cover: This add-on provides emergency roadside assistance services such as help in changing the flat tyre, roadside repairs, emergency fuel refilling and towing facility.
  4. #Return to Invoice: This add-on ensures that in the event of complete loss or theft of a car, the policyholder gets the car’s original invoice value and not just the Insured declared value.

So, it’s suggested that you should go for an insurance policy which should provide extra coverage to your car, by allowing you to customize it as per your needs.

Final Word :

Who doesn’t want ease and convenience? When we buy a car, we feel like ending up all the proceeding in one place. However, if you are internet savvy, hassle in buying insurance is not a question for you.

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