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Is it Mandatory to Buy Car Insurance from Your Auto Dealer?

By Finserv MARKETS - Aug 14,2019
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Pros And Cons Of Buying Car Insurance From A Dealer.

Most people believe that buying a car insurance policy from your auto dealer is the right thing to do. As a matter of fact, it is a common belief that it is mandatory to do so. People tend to buy a four wheeler policy from their auto dealer simply because the process is hassle-free, and you do not have to compare different options.

The auto dealer acts as a mediator between you and your insurance provider. Although your auto dealer gets everything readily done for you, it inevitably comes at a hefty price. In other words, your car insurance premium rates are likely to shoot up.

Alternatively, you can buckle-up and search for better car insurance deals online. Not only can you secure a better deal by yourself, but you also get the liberty of choosing the necessary add-on benefits on your cover.

To understand whether or not it is mandatory to buy insurance from your auto dealer, consider the following pros and cons.


Following are the advantages of buying car insurance from your auto dealer:–

  • You do not have to actively seek the initiative when purchasing a car insurance policy from your auto dealer. The entire process, from searching effective insurance plans, knowing the underlying features and benefits it offers, and taking an informed decision, everything is taken care of. Sounds convenient, right?
  • Since you are purchasing the car as well the car insurance from the same auto dealer, you will be offered bundled discounts.
  • Your auto dealer will make sure that they guide you through the policy purchasing process. Further, in case of any mishap, then you are liable to consult/inform your auto dealer along with the policy provider to make a successful claim.


Following are the disadvantages of taking car insurance from your auto dealer:–

  • You will not be able to browse through different beneficial insurance plans with your auto dealer. As a matter of fact, each auto dealer collaborates with a couple of insurance providers, thus offering products and services made available by them. Hence, your options are limited when you purchase a car insurance policy with your auto dealer.
  • When you buy an insurance policy from your auto dealer, the premium rates are relatively higher than other insurance policies available online. The raised premium rates are nothing but the commission that the insurer pays to the auto dealer for making the plan available to you. Thus, it impacts the overall cost of your policy.
  • The add-on offered to you by your auto dealer may not be significantly beneficial to you. Unfortunately, you will have no choice but to pay from them, further making the premiums higher than those basic comprehensive plans.

In Conclusion

When you buy car insurance from your auto dealer, it has both advantages as well as disadvantages. However, when it comes to buying a four wheeler policy, it is highly advisable to search and compare different policies online.

In case you have already purchased car insurance from your auto dealer, you can renew your insurance online from a different dealer.

With Bajaj Allianz car insurance from Finserv MARKETS, you can easily buy/renew your four wheeler insurance policy online. Also, you can benefit from features like cash-free servicing and 24×7 car roadside assistance anywhere in India.

To know more on Car Insurance and related topics in depth, you can check out these blogs:

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522