April is generally a slack month for the Indian car market because Indian car buyers prefer buying their cars during festivals, and they aren't many in April. However, April 2022 saw a new high with the sale of 2,93,081 passenger cars, and the sales rose by 2.4% compared to April 2021. Sounds interesting! But your job does not end with buying a car only. In fact, it begins as you need to buy the right car insurance policy from the right place.
Car buyers must buy third-party car insurance for their new four-wheeler in India, but prudent car owners increase the protective cover for their vehicle by purchasing a comprehensive car insurance policy; but which is the best place to buy one? Generally, car dealers offer to provide a car insurance policy. However, one must remember that a car dealer is an expert in selling cars and not in car insurance. When drivers can access insurance providers online, is there a need to buy from car dealers? Maybe not! Buying car insurance from dealers often benefits them and the insurer they tie up with, but not you. This is due to various drawbacks associated with buying car insurance from dealers. Let's glance at them below.
Read more - Buying Car Insurance Online vs Offline
Drawbacks of Buying Car Insurance from Car Dealers
Although a car is brand new, the car owner cannot drive it out of the showroom without buying 3rd party car insurance. That is the primary reason car dealers in India offer a package deal to their customers that includes four-wheeler insurance. However, when a car owner buys car insurance from a car dealer, he may not get a good deal. Here is why.
1. It does not Favor the Car Owner
Car dealers have excellent ties with insurance providers. However, such deals generally favor the car dealer, the insurance provider, but not the car owner. But unfortunately, the car owner is too excited about his new buy to notice or assumes it to be a freebie and gladly accepts it.
Secondly, the car owners ponder- why take the trouble getting it themselves when the car insurance is readily available from the car dealer?
Thirdly, new drivers do not know much about insurance, so they are happy to take what the dealer offers and do not know that they need to plan car insurance before buying it.
However, if there is a reason to raise a claim, the car insurance policy provided by the car dealer may not offer the necessary cover. And the car owner may have to bear most of the liabilities.
2. Lacks Customization
Car insurance price varies per brand, inclusions, exclusions, add-ons, etc. Car owners need not be experts in ascertaining the risks their vehicles may be subject to. But they should know at least their primary dangers so they can decide on what to include or exclude before buying a car insurance policy.
For instance, For instance, drivers in theft-prone areas need a return to invoice cover or RTI in car insurance. But what is RTI in car insurance? If a driver has a car insurance policy with an RTI cover, he can raise a claim in case of car theft within three years of purchase and receive compensation up to the car's invoice, purchase price, or ex-showroom price.
If he chooses to take what the dealer offers and excludes the RTI add-on, he will receive the IDV as compensation.
3. Compare Car Insurance Online
The general practice is for car owners to decide on the cover they need and then choose a car insurance provider who offers the same at the best rates. For this, the car owner must compare car insurance of various insurers and buy car insurance online.
Before online car insurance renewals or purchases, compare features, inclusions, exclusions and car insurance prices to decide on the cheapest car insurance in India. That is because car owners can access information and research online.
However, the car insurance premium offered by the dealer is a pre-determined one that leaves no room for comparison.
4. Wrong Choice of Add-ons
When car owners buy a car insurance policy, they first decide on the insurance coverage they need. For instance, if the car owner resides in an area prone to floods and has only third-party car insurance, all liabilities will be out-of-the-pocket for the insured. That is because third-party car insurance covers only third-party liabilities.
However, if they have a comprehensive car insurance policy with add-ons like engine protection, zero depreciation car insurance, consumables cover in car insurance, RTI covers, etc., their liability may be minimum or even nil.
The car dealer's car insurance offers a few add-ons, which may not work for the insured. For instance, some insurance providers provide a CNG protective kit which is of no use for a petrol/diesel run car. They may have to buy a few add-ons to protect their vehicle, making car insurance expensive.
5. Terms and Conditions are Crucial
A 4-wheeler insurance policy is a legally binding contract between the insurer and the insured. The insurer agrees to protect the insured against certain damages under specified conditions for a price known as car insurance quotes.
The document contains the general and comprehensive coverage, inclusion (what they are willing to cover) and exclusion (what the insurance policy does not cover), and other important information.
When the insured buys the four-wheeler insurance online, he can check the terms and conditions of the insurer and buy only if the same is acceptable to him. But a car dealer's four-wheeler insurance policy does offer such choices, and they have to accept the pre-set terms and conditions of the insurance company, which result in a claim rejection and out-of-the-pocket costs for the buyer.
There is nothing unusual when car owners buy a four-wheeler insurance policy from car dealers. However, one must remember that insurance aims to eliminate or reduce the losses arising from vehicular accidents. So, one must plan properly and buy car insurance online.
Read more - Why Should You Buy a Second Hand Car?