Many people have this dream of buying a car and avail a car loan to make the purchase. Just buying a car is not enough. You must insure it with a car insurance plan. Car insurance has two important components: Own-damage Cover and Third-party Liability Cover.
Own-damage Cover offers protection against theft or damage to the vehicle and third-party liability insurance covers the damages caused to property of a third person or injury/death of an unrelated party in an accident. Availing Third-party Cover is mandatory in India and no vehicle owner dare miss this cover.
Now, many car dealers offer car insurance to customers bundling it along with the car. This is done because car dealers have a tie-up with the insurance companies and sell insurance to make good profits.
A lot of car buyers opt for the insurance offered by the car dealer, believing it to be the easier choice. Look for the best deals on car insurance across the market, before locking on the deal. So, before you buy car insurance from the car dealer, check its pros and cons.
The main job of car dealers is to sell cars and not car insurance policies. However, these days, dealers have started selling car insurance plans along with the car (Bundled Plans). This insurance plan has limited options as the car dealer has a tie-up with just two or three insurers. Dealers will be able to sell insurance of only those insurers with which they have tie-ups. There are a lot of restrictions on such plans.
Normally, car dealers enter into a tie-up and other business arrangements with the insurance companies to offer car insurance along with the car. Apart from the policy premiums, insurers also decide on major aspects like servicing and claim. These get passed on to the car dealers in the form of various expenses. This will have an impact on the price of the policy and the customer will have to pay a high premium.
Car insurance comes with add-ons like zero depreciation, return to invoice, engine protection cover and so on. These add-ons must be chosen, keeping specific requirements of the car and its owner in mind.
But, the add-ons in bundled car insurance policies offered by dealers, do not match the car owner's usage or requirements. As dealers get commissions for the policies sold, they push the add-ons for higher profits. Add-ons are expensive if you buy them from dealers as there don’t offer discounts.
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