Five Disadvantages of Purchasing Insurance Through Your Car Dealership
It is often observed that car owners pay very little attention to the quality of the insurance policies they buy for their vehicles. While buying a car, they expect everything to be the updated and latest version, like the best possible model, and they stretch the budget to afford a little above what they planned. But car insurance policy doesn’t seem to be of that much importance.
Car dealers know this psychology, and they use it to their advantage. Most of the time, car dealerships give new car owners an offer to buy insurance at a minimal price along with the car.
While it has its own benefits, it does more bad than good. On the surface, it might look like an attractive offer, but it has many drawbacks because it is, to put it simply, a shortcut. For example, getting to compare car insurance is an integral step for choosing the best insurance, but you do not have the privilege of doing so.
The car owners don’t have to look at the details, the dealers carry everything on, the policy chosen is the dealer’s choice, and all the car owner has to do is pay for it. Let us find out what all is wrong with this procedure of obtaining a car insurance policy for your brand-new car.
Drawbacks of Buying Car Insurance at a Dealership
- Inability to Compare
When the car dealership offers you to buy a policy along with the car, they do not keep an entire portfolio of policies available in the market. Usually, car dealerships have tie-ups with various insurance companies. This leads to them receiving a commission per policy they sell. Hence, they do not show you options, making it impossible for you to compare car insurance policies.
This is a huge drawback since comparing policies is the first step for choosing the best-suited policy for your car according to your financial plan.
- No FLexibility
As mentioned above, the dealership tie-ups become a huge hurdle in your way of getting good 4-wheeler/car insurance. The dealership will only inform you of the providers they have a tie up with, and here, you will lose the chance of getting better offers from better companies.
This is a disadvantage since there are plenty of online and offline options that offer great benefits and coverage at cheap policy costs. You can save a lot of money and receive better services and coverage at the time of an accident.
- Limited Add-Ons
There are numerous add-ons in the market with leading insurers like Tata AIG. Some of the best add-ons available in the four-wheeler insurance market are zero depreciation, engine protection, roadside assistance, no-claim bonus protection, return to invoice, daily allowance, passenger cover, etc.
When you can buy these but are only given a few limited options by the dealer, you miss out on a lot of benefits. This drawback inflicts a great loss on your policy since you have no choice but to accept whatever they offer.
- Inability to Manage Coverage
The inability to manage or customise your coverage can be extremely frustrating. As we have mentioned above, you do not have the freedom to choose your add-on covers, and hence your coverage becomes rigid. The car dealers have a fixed number of policies and hence a fixed coverage along with those. This leads to the compulsion to accept whatever is available.
This is a huge drawback of getting car insurance at the dealership because outside of that, you get to customise and manage your insurance coverage as well as the insured declared value.
- Lack of Overall Awareness
When the dealer states something as a fact, you have no other option but to trust them. All the details are informed to you, but since you are not in complete control or authority of the process, you don’t know everything.
The biggest relief for car owners is that they do not have to go through all the “tedious paperwork” and “details and documentation” of the insurance policy. But that is where they miss the point.
This is a drawback since a policy should be customised according to your personal preferences, financial plans, and vehicle. That is completely missing in this procedure.
Buying a policy from an agent or through online methods is a much better and wiser choice. It is not just a statement; it can be proven! Statistics say that the insurance sold by car dealers is more expensive (by a whopping 40% difference) than individually bought policies. It is always advised to buy your policy on your own or with an agent!
If you have mistakenly bought a policy from your dealer and later found out that there are better options out there, don’t worry. When it is time to renew your policy, switch your insurance provider to a better company.