When you buy a car, opting for the insurance offered by the dealer may seem like an easier choice. But if you take a moment to look up the plans available online, you will see there are much better options available in the market.
Gaurav is over the moon. He has managed to save up enough money to buy his very first car. This pleased Gaurav’s father, but he has a question on his mind – How is Gaurav planning to insure his new vehicle? Insurance was something that had skipped Gaurav’s mind altogether. He told his father that the car dealer had suggested a particular plan and he might just go ahead with it. His father was a bit skeptical and advised him to wait a little longer and enquire more about what the plan is offering. After all, insurance is what will protect Gaurav from the financial implications of the risks he faces on the road. So, when Gaurav began researching, he slowly started to realize that there was significant difference between buying a policy from the dealer and buying it online. Here’s a look at what Gaurav found:
Buying Car Insurance from Dealer – Yay or Nay?
No doubt, the entire process of buying insurance is streamlined, hassle-free and more convenient when it is through a dealership. All that needs to be done is – one – give the nod, two – sign the papers and three – pay whatever price the dealer says. But there is a huge downside to this. The possible problems that could arise if insurance is availed via the dealership route are:
- Limited options to choose from – A dealer’s primary objective is to sell cars – not insurance. The dealer, therefore, will not be able to offer the buyer too many options when it comes to insurance. If the dealer has a tie-up with two or three insurance companies, the dealer is only going to be able to offer policies only by those companies. It will not provide options beyond their plans, thus restricting customers on the kind of policies they can avail.
- Premiums can cost more – Generally, car dealers enter into tie-ups and arrangements with insurance companies and dictate aspects such as servicing and claims, apart from premiums. These, in turn, get passed on to the car dealers in the form of various expenses. The total payment that a dealer may receive from an insurance company can go as high as 40%. This will have an impact on the policy price, and for customers, this can translate into high premiums.
- Add-ons offered may not be the best fit – Car insurance add-ons must be chosen keeping in mind the specific requirements of the car and its owner. It has been observed that the kind of add-ons offered on policies by dealers does not necessarily match the car owner’s usage or requirements. Since dealers work on commission basis, they may be tempted to push those add-ons that generate them the highest earnings. Also, the add-ons cost a bit on the higher side as dealers tend to have limited discounts to pass on to the car buyers.
Buying Car Insurance from Dealer Vs Buying It Online
The internet is truly a gift. People can research, read reviews and make purchases in a matter of a few clicks. If the rates of car insurance policies offered by dealers are compared to those offered online, it can be found that individuals can save as much as 40% by choosing to buy the insurance policy online. The reason for this is because the insurance company is able to save money on the commissions payable, paperwork, administration fees, etc. These benefits get passed on to the customers, helping them fetch better rates on their policy.
Another major difference between buying policies via a dealer and online is the number of insurance choices available. The car buyer does not have to restrict himself or herself to the limited number of policies that the dealer is offering, rather through the online route, the individual can compare all of the available options in the market and accordingly, select a suitable plan. Almost all insurance companies have an established online presence. In case of add-ons, the online route gives car buyers the freedom to choose from the riders they deem fit. Individuals can opt for those riders they think are right for them, without any form of compulsion.
Finding the Right Car Insurance Policy
After evaluating all the pros and cons, Gaurav has decided that the best option for him would be to buy car insurance online. Since he is investing two-year of savings into buying his dream car, he should have the upper hand in deciding how he secures his prized possession. So now, what’s next? Finding the right car insurance policy, of course.
The first step to finding the best-suited insurance policy is comparing the features offered under different insurance plans. Individuals can compare the policy recommended by the dealer against the other options available in the market. Besides taking into consideration what a particular policy is offering, car buyers should take a look at the cost that is charged for the cover. Insurance companies offer varying premium rates for the coverage extended by them.
After finalizing on the policy and the insurance company, the next step is to decide the add-ons. It must be noted that add-ons are extra covers that can be opted to enhance the protection offered by a basic comprehensive car insurance plan. Knowledge about what add-ons are suitable is important so that individuals don’t end up simply spending money for a cover they don’t actually need. A few essential add-ons that can be included to the base plan are:
- Zero or Nil Depreciation: This add-on offers complete coverage without factoring in the depreciation of parts like plastic, fibre, rubber and glass.
- Engine Protection Cover: This add-on cover provides protection against damage to the car’s engine due to water ingression leading to hydrostatic lock.
- No Claim Bonus Protection Cover: This add-on helps in keeping the accrued No Claim Bonus intact on the next policy renewal, even when a claim has been made.
- 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.
- Return to Invoice: This add-on ensures that in the event of complete loss or theft of car, the policyholder gets the car’s original invoice value and not just the IDV.
To all the Gauravs out there, who’ve been saving up for years to buy their first vehicle – remember, nothing in life is secure. Thefts, accidents, damage due to natural catastrophes, etc., the risks that your car faces are plenty. The only way to protect yourself from the financial consequences of such uneventful incidents is through car insurance.
The mode you choose to buy car insurance is completely up to you – you can buy it from the dealer (this will cost you a hefty amount) or from an online portal and save a huge sum of money. Always make an informed decision about the policy you purchase, and here in the case of car insurance, it is advisable to opt for the online route since you can buy a plan specific to your needs and also pay a lesser rate on it (compared to how much you’ll be paying the dealer). All you need to do is get the basic car details with the registration number and invoice from the car dealer, go online and get your car insured. If the registration is pending, you can still buy the policy online by giving your details, your car’s engine and chasis number. You would get a policy copy mailed to you which you need to pass on to your car dealer.
It absolutely is! So, what are you waiting for? Compare car insurance policies online and save big now!