Pros & Cons of Buying Motor Insurance From a Car Dealer

The process of buying insurance from a car dealer certainly saves the customer a lot of time. This is predominantly because the car dealer would be aware of the intricacies in the policy and would advise the customer on the most appropriate plan. The customer also does not have to approach an agent or visit the branch office of the insurer for the insurance purchase.

1. The entire process of insurance purchase is streamlined and more convenient when it is through a dealership.
2. The customer may receive bundling discounts on the purchase of the car and the insurance from the car dealer.
3. The dealership will be able to offer the customer a policy that incorporates all the risks he/she wishes to cover. Following this, the customer is not required to approach an insurer for his/her coverage needs.
4. The customer can get in touch with the car dealer to get clarifications on the coverage or at the time of claims. The dealer will efficiently assist the customer in such matters.

Disadvantages of Buying Motor Insurance From a Car Dealer:

Some car manufacturers enrol with an insurance intermediary and dictate aspects such as claims and servicing. Others negotiate with the insurance company directly. All in all, car dealers usually make a lot of money through the sale of insurance.

You should know that buying insurance from a dealership has its own set of disadvantages:

1. The car dealer will have tie-ups with specific insurance companies. The customer will be able to purchase the insurance solutions provided by these companies only. However, the online mode of insurance purchase helps the customer select from a wide range of insurance companies offering extensive coverage.
2. The car dealer might not give you the best deal on insurance. This means that while you save time buying insurance, you may not save cash. Car dealers negotiate with insurance companies on a commission. This means that you may have to pay premiums that are higher than what you would pay if you purchased insurance through another mode. 
3. The process of buying car insurance from a dealer does not give you the opportunity to compare plans between insurers. This is, in fact, a crucial step in the process of deciding on an insurance policy.
4. Voluntary excesses and add-on cover may be included in your auto insurance policy, but dealerships may not advertise them. Be cautious and read through your policy coverage carefully. If your policy contains a high number of voluntary excesses, you’ll have to pay a large portion of the claim amount yourself. Having useless add-on coverage will only increase your auto insurance premium, with no other benefits.

The Final Word:

Although the standard procedure to buy motor insurance for decades has been through insurance agents, alternative modes of insurance sales have gained immense popularity these days. The modern customer requires instant gratification; so the lag between the purchase of a car and its insurance has become more of an inconvenience. With the introduction of online policies, the customer is able to buy a suitable plan online at the comfort of his home.

It is possible to buy online car insurance policies through neutral financial websites or from the insurance company's website directly. Online policies are also cheaper than offline plans and can be renewed/maintained easily. The premium payments can be made effortlessly online, in a very secure manner.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017