I am buying a new car and finalized the dealer. I got a good deal with some cash discount and freebie car accessories. They told me that I can opt for instant car insurance from them which will be easy to process. Is it ok to take car insurance from the dealer?
Good to know that you have decided to buy a new car and getting some freebies and discounts from your car dealer. It is not a new thing to see car dealers trying to sell car insurance to all their customers.
If I were you, I would avoid taking car insurance from the dealer. The reason is that car dealers usually have a hefty commission which they are offered by insurance companies. As a result the car insurance cost gets hiked where you as a customer end up paying the extra premium. So in other words, the car dealer can make up for any revenue losses that he may have had while offering you discounts on car accessories.
A simple online search for car insurance can not only save you money but will also give you the opportunity to compare car insurance quotes from various insurance companies before to make a final decision.
Getting an Insurance policy from your dealer might not be beneficial as they often have vested interests. Before going in for a policy, keep the following things in mind.
Types of Insurance – There are two types of auto insurance policies. One being third-party insurance, which is compulsory in India and the other is a comprehensive insurance policy. Third-party insurance is typically provided by dealers and the premium is factored in the price of the vehicle.
Comprehensive insurance, on the other hand, takes care of third party liabilities, personal accidents and theft. Although the comprehensive policy is expensive compared to the compulsory third-party liability, it is worth every extra penny.
Add-ons – If you are purchasing insurance through an agent, there is a fair chance that he/ she would try to sell you additional coverage. Additional coverage would mean optimal protection if you purchase them based on your requirement.
For example, a depreciation waiver cover would allow you to claim the entire amount on auto parts to be replaced. So, do a review of the list of add-ons on the Car Insurance policy and pick ones that are beneficial for you.
No-Claim Bonus (NCB) – The No-Claim Bonus feature in auto insurance allows you a discount on a certain year’s premium if no claims were made in the previous year. The NCB rate offered is same for all the insurance providers. The discount for car and two-wheeler insurance policies can rise up to 50 percent. If you continue with your policy without breaking it for years, the No-Claim Bonuses would accumulate substantially.
Voluntary Excess – This is the amount of money you would pay from your pocket without filing a claim. By choosing this option, you would be decreasing the premium amount by around 35%, as on the event of a claim, the insurer would not have to pay as much. The amount chosen as voluntary excess should not be more than the No-Claims Bonus sum that you are entitled to in the following year.
Research – Don’t give into a dealer’s offer just because he is pushing too hard. Look at the products available in the market to find the best offers. You can compare products online with just a few clicks. Buying a policy online can help you save money.
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