Buying car insurance from your car dealer may be easy, but is it a smart thing to do?

When you buy a new car, some dealers offer insurance. For the car buyer, taking the insurance from the dealer seems like the easiest thing to do. It may in fact be the easiest thing to do, but it may not necessarily be the smartest thing to do. 

If you buy car insurance from the dealer you will realize that there are significant differences between buying a policy from the dealer and buying it from a qualified agent. 

At a car dealership the entire process of buying insurance is streamlined, hassle-free and more convenient. There isn’t much for the buyer to do other than give the ok, sign some papers and pay whatever price the dealer quotes. It seems and in fact is easy, but there are some down sides. So, what possible problems can there be? 

The first problem is with the limited amount of options to choose from. Car dealers are focused on selling cars and therefore are not able to offer many options when it comes to insurance. The dealer will only be able to offer what’s available through the insurance companies they deal with. 

Car dealers often enter into tie-up and arrangements with insurance companies who sometimes pass on various costs onto the dealer. This will have an impact on the policy price, and for customers, this can translate into higher premiums. 

The kind of add-ons offered on policies by dealers do not necessarily match the car owner’s usage or requirements. dealers work on commission basis, they may be tempted to push those add-ons that generate them the highest earnings. Also, the add-ons cost a bit on the higher side as dealers tend to have limited discounts to pass on to the car buyers. 

Although buying car insurance through a car dealer is an easy process, the insurance you get may not be the best or cheapest. Talk to a qualified insurance agent to find out what insurance is best for you.