Buying the best car insurance policy is a matter surrounded by a lot of confusing facts, especially for first-time buyers. When you buy a car, you have to get it insured, and you can choose to get it from the dealership where you buy the vehicle or elsewhere.
Many people will find themselves in confusion, wondering whether it is appropriate to buy the insurance from the dealership or not.
However, the big question remains, how should you know whether it is okay or not? The only way to understand and make the right decision is by understanding everything that revolves around buying car insurance from your dealership.
Is It a Must to Buy Car Insurance from the Dealership?
No!
Many people have the whole misconception that they must buy their car insurance policies from their car dealerships. It is not a must. Although there are many people who prefer to do buy from their dealers, that does not mean that it is a must.
Once you have purchased your car, you are free to find any insurance company to work with. Your dealership will offer to insure your car since they will get a commission. You do not have to go out there looking for an insurance company. Which may not be a very easy job.
However, the fact remains there can be both pros and cons of using your dealership as your car insurer. They are worth knowing as they will help you make an informed decision.
Pros of Buying a Plan from Dealership
Easy Process
The process of buying car insurance from the dealership will always be easier as compared to finding another insurance company to work with. It is very clear that you will not have to spend a lot of time researching the companies, visiting offices, or talking to agents since you have your dealer.
In addition to that, your dealer knows so much about the intricacies around the policy in relation to your car. As a result, you will find it easy to work with them and finalize everything within a short time. Many dealers will also offer to do the process on your behalf.
Bundling Discounts
Whenever you decide to buy the policy from your dealership, you stand a high chance of getting bundling discounts. Many dealers are willing to do this since you are purchasing the car and the insurance policy at the same time. The discounts might not be much, but they are significant at the point of buying.
A Better Understanding of the Process
A car dealership will offer you more information and in a more understandable manner as compared to an insurance company. As the dealership will be selling you the car, they know all the details revolving around the car and suitable policy for it.
For example, you are buying a Chevy and you are not familiar with the brand and the insurance options. You need the vehicle on the road quickly and don’t know which insurer is offering good plans for that vehicle.
All you can do is rely on the Chevy Dealer. They know all the details and you will get full details about the coverage, which is the best.
Better Customer Care
Once you have bought the insurance from your dealer, there are high chances that you will get better customer care even in the future as compared to an outside insurer. Many dealers will have a special helpdesk set aside for insurance claims and queries.
As a result, it becomes easy to get all the necessary help they need or assistance when filing a claim.
Dealer Add-Ons
The dealer will be more forthcoming to help you with any add-ons that you would like for your policy. Many people are able to get a policy that carries extras by working with their dealers.
Cons are Here
As much as buying car insurance from your dealer may come with some pros, it is crucial to note that it has its cons. Understand the cons to know whether it is an option to go for or not.
No Variety of Companies
A car dealership may only have an arrangement with one specific insurance company. As a result, you will be required to take the policy from that particular company in case you choose to buy it from the dealership.
As a result, this locks you out of other options. This will be a drawback since other insurance companies may have better terms to choose from.
Dealer Pre-Packaged Policies
Did you know that some dealers will offer their very own pre-packages policies that come with lots of extra features? This might not be a good thing for a car buyer. When you decide to work with them, you will be required to pay for the extras, although you do not need them. As a result, you will end up spending more on the policy.
More Spending
Do not be fooled by the fact that your dealer will save you lots of time and most likely offer you some discounts. In reality, you will be losing a lot when it comes to discounts.
What you get from your dealer is a policy, and you have to pay for their operational costs. However, when you consider insurance companies on the other side, they do their work online; as a result, they are able to save more than 60% of their operational costs.
Remember that your dealer will also get some commission from the insurer for the work, which raises your premiums even further. When you put all the figures together, you will realize that you will be spending more when buying from your car dealer than from online insurance companies.
Chances of Useless Add-ons
Here is how it works. For every plan, your dealer will get a percentage commission. As a result, many dealers will give you add-ons that are useless but bring them more commission. This will be to your disadvantage as you will have to spend more for something that does not really help you.
Which is the Right Way to Go?
Now that you have looked at all the pros and cons of buying car insurance from a dealership, you may be left wondering which is the right way to go. It is very simple; all you have to do is look at the pros and cons, compare them, and see what works best for you.
If you are the type of person who does not want to waste time moving from one insurance company or agent to the other, then you can save time by buying from your dealer. If you are the type of person who does not have the patience to go through the whole process, your dealership can do it for you, and you can work with them.
However, you will have to spend some extra coins on your policy as compared to working with the companies.
On the other side, if you want to get a good insurance plan for your car, take time, and find a suitable insurer. Do not rely on just one single insurance company that you get from your dealer.
To buy a car will take between 2 to 3 days. Spend this time wisely. Find several insurance companies, and you can narrow down to the best one. In return, you will be able to land on a good deal and better terms.
If you want to save some money off your car insurance plan, you should not buy it from your dealership.
Few Things to Consider
If you decide to buy the policy from a dealership, then here are some of the things that you should consider.
- Add-ons: Always be careful with the type of add-ons you are getting. It is a commission business for many dealers. As a result, you have to research and know which add-ons are necessary for you and which one you do not need.
- No Claim Bonus or (NCB): It refers to a discount you receive on premiums in case you do not make a claim within a policy year. Such a bonus can amount to between 20% and 50%. It is worth taking the bonus. In case you are buying a new car, it is possible to transfer the policy of your old car to the new one and claim the “no claim” bonus. However, many dealers miss this information.
Conclusion
It does not matter whether it is your first time to buy a car or not. You deserve the best, whether it is in terms of a car or insurance. As a result, you need to have an open mind whenever you want to purchase your insurance.
Look at buying a plan from the dealership as a two-sided coin. There are pros and cons. It is upon you to carefully study both of them and weight them to come up with the best step for you to take.
It is also important to remember that buying from insurance companies comes with its pros and cons as well.
