Is it compulsory to buy insurance from the car dealer?

It is mandatory for every vehicle to have a 3rd party liability insurance before coming onto the road, However, if your question is, is it compulsory to buy insurance from the car dealer, then the answer is no. Most people choose it because it is easier and more convenient to buy your vehicle's insurance from your vehicle provider. If you trust the dealer you do not need to investigate or compare the wide variety of coverage options accessible. Your car dealer effectively is a go-between for you and your insurance company.

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When buying a new car, one of the main decisions that buyers need to consider is buying car insurance. The Motor Act makes it mandatory for all vehicle owners to have a third party liability cover. There is a lot of confusion among new car buyers regarding buying car insurance. This is one of the main questions that new car buyers have - Is it mandatory to buy car insurance from a car dealer? Most people buy car insurance from their car dealers as it is the most convenient way, but it is absolutely not necessary to buy car insurance from your auto dealer.  

Is it Compulsory to Buy Car Insurance from a Car Dealer?

Most people have this question when buying a new car - Is it mandatory to buy insurance from a car dealer in India? However, there is no official rule or law that states that you need to buy car insurance from your dealer. You may choose to purchase car insurance from any of the reputed insurance companies in the Indian insurance market. There are many benefits to buying insurance with your car dealer such as the convenience of buying instantly without any hassle, support from your car dealership etc. However, it is a good idea to take a look at other car insurance plans available on the market before signing up for insurance with your car dealer, as you may find better deals at lower premiums. We have compiled a list of the Pros and Cons to consider before buying insurance from your car dealer.

Pros of Buying Car Insurance from Your Auto Dealer

  • The process of buying car insurance from your car dealer is very simple. You don’t need to do any research and your car dealer can pick out the best plan for you.

  • Car dealerships often offer discounts on car insurance as an incentive to buy insurance from them. The dealership can also clarify any doubts you may have regarding the insurance you are going to purchase from them.

  • In the case of car insurance claims, the car dealership may help you with the applications and insurance claims process. You can contact your car dealer at any time with questions about the insurance plan.

  • Your car dealer can personally help you to pick out the right car insurance plan with all the additional coverage or riders you may need.

Cons of Buying Car Insurance from Your Auto Dealer

  • Car dealers earn a commission when you purchase an insurance plan directly from them. The cost of their commission is already added into the insurance plan, so you might be paying extra for the same insurance available for a cheaper price outside of your car dealership.

  • Car dealers usually have tie-ups with one or two insurance companies and when you buy a car from them, you may be limited to insurance plans from these specific companies only.

  • Your car dealer may not have the insurance plans with riders or additional features you are looking for. In this case, it is better to look for plans outside than buying a plan you are not satisfied with.

  • Some car dealerships engage in shady practices such as adding riders or add-on covers without your consent, as they expect buyers will not read through all of the terms and conditions. You should always read the terms and conditions of any legal document you are signing.

  • You can find many different car insurance options available online that may not be available at your car dealership. It is important to research all available insurance plans, so you can choose the best possible option.

     

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Conclusion

Now that you are aware of the advantages and disadvantages of buying car insurance from a car dealership, you can make an informed decision. It is always a good idea to take a look at all the insurance plans and their features available online before taking the final call. There is a good chance that you may find a car insurance plan to your liking that is available online at a lower price compared to the plan available at your car dealer. You can take a look at the variety of comprehensive car insurance plans available at Finserv MARKETS.  

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Frequently Asked Questions

  • ✔️ Is it necessary to buy car insurance from a dealer?

    No, it is not compulsory to buy car insurance from a car dealer. You can buy car insurance from any reputed insurance company outside of your car dealership.

  • ✔️Why is car dealer insurance so expensive?

    When you buy insurance from a car dealership, the cost of their commission is added to your premiums, increasing the overall price of the insurance plan.

  • ✔️Is online car insurance safe?

    Buying car insurance online from a reputed car dealership is just as safe as buying car insurance in person.  

  • ✔️Is it cheaper to buy car insurance online or through an agent?

    It is generally cheaper to buy insurance online, as there is no agent’s commission fee involved when buying online. 

     

  • ✔️Which age group pays the most for car insurance?

    Younger people around the age of 20 pay the highest amount in car insurance, as they are considered statistically more likely to get into accidents. As they grow older, the premiums on their car insurance plans go down.

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