Why You Should Not Buy Insurance From a Car Dealer?

When you buy a new car, the dealer will often offer you insurance as an add-on. It may seem convenient to purchase insurance from the same place you bought your car, but is it the best option for you? In this article, we’ll explore why you should never buy insurance from your car dealer and what alternatives you have.

The Add-Ons Are Not Worth It

Return to Invoice Add-On

One of the most common add-ons offered by car dealers is the Return to Invoice add-on. This add-on promises to cover the difference between the insured value of your car and the invoice value in case of total loss or theft. However, this add-on is often overpriced and can be easily obtained from insurance companies at a lower cost.

Engine Protection Cover

Another popular add-on is the Engine Protection Cover, which promises to cover the cost of repairing or replacing your car’s engine in case of damage. However, this add-on is often limited to specific types of engine damage and may not cover all scenarios. It is also available from insurance companies at a lower cost.

Roadside Assistance Add-On

The Roadside Assistance add-on is another common offering from car dealers. This add-on promises to provide assistance in case of a breakdown or accident. However, this service is often limited to a certain number of kilometers from the dealership and may not be available in all areas. You can easily obtain this service from insurance companies or automobile associations at a lower cost.

No Claim Bonus Add-On

The No Claim Bonus add-on promises to protect your no claim bonus in case of a claim. However, this add-on is often expensive and can be easily obtained from insurance companies at a lower cost.

Car Insurance Showroom or Outside?

When purchasing a new car, the dealer may offer you the option to buy insurance from them or from an outside insurance company. It may seem more convenient to buy insurance from the showroom, but it is not always the best option.

Insurance Companies

Insurance companies offer a wide range of car insurance policies with different coverage options and add-ons. By purchasing insurance from an insurance company, you have the freedom to choose the policy that best suits your needs and budget. You can also compare quotes from different insurance companies to get the best deal.

Car Dealer Insurance

Car dealers often have tie-ups with specific insurance companies and may only offer insurance from those companies. This limits your options and may not provide you with the best coverage or price. Additionally, car dealers may receive a commission for selling insurance, which can drive up the cost for the customer.

Add-Ons: Are They Really Necessary?

When purchasing car insurance from a dealer, you may be pressured into buying add-ons that you may not need. These add-ons may seem like a good idea at the time, but they often come at a high cost and may not provide the coverage you expect.

Zero Depreciation Add-On

The Zero Depreciation add-on promises to cover the full cost of repairs or replacement without factoring in depreciation. However, this add-on is often expensive and may not be necessary for newer cars. Additionally, insurance companies may offer this add-on at a lower cost.

Engine Protection Cover

As mentioned earlier, the Engine Protection Cover may not cover all types of engine damage and may not be necessary for newer cars. It is important to carefully consider the cost and coverage of this add-on before purchasing it.

Buying Car Insurance from a Dealer: The Hidden Costs

When purchasing car insurance from a dealer, there may be hidden costs that you are not aware of. These costs can add up and make the insurance more expensive than if you were to buy it from an insurance company.

Used Car Dealer Insurance Cost

If you are buying a used car, the dealer may offer insurance at a higher cost than if you were to buy it from an insurance company. This is because the dealer may add a markup to the insurance cost to make a profit.

Additional Fees

When buying insurance from a dealer, you may be charged additional fees such as processing fees, documentation fees, and administrative fees. These fees can add up and make the insurance more expensive than if you were to buy it from an insurance company.

The Importance of Comparing Quotes

When purchasing car insurance, it is important to compare quotes from different insurance companies to get the best deal. By comparing quotes, you can find the policy that best suits your needs and budget.

Online Comparison Tools

There are many online tools available that allow you to compare quotes from different insurance companies. These tools make it easy to find the best deal and save money on your car insurance.

Insurance Agents

Insurance agents can also help you compare quotes from different insurance companies. They have knowledge and experience in the insurance industry and can help you find the best policy for your needs.

The Bottom Line

While it may seem convenient to buy insurance from your car dealer, it is not always the best option. By purchasing insurance from an insurance company, you have the freedom to choose the policy that best suits your needs and budget. You can also compare quotes from different insurance companies to get the best deal. Additionally, buying insurance from a dealer may come with hidden costs and add-ons that you may not need. It is important to carefully consider your options and compare quotes before making a decision.

In conclusion, never buy insurance from your car dealer. Instead, take the time to research and compare quotes from different insurance companies to find the best policy for your needs. This will not only save you money but also ensure that you have the right coverage for your car.

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