What are the Advantages and Disadvantages of Buying Motor Insurance from Car Dealer?

With so many options for car loans in the market, owning a car is no more a distant dream for most people. However, you have to wait before you take your prized possession on the road till you get it insured. It is mandatory by law to insure your vehicle after buying it.

After detarification in Malaysia, the insurance sector has witnessed some reforms. With detarification, the premium rates have also become flexible based on your risk profile which is making more and more people aware of nuances of car insurance in Malaysia.

Since a long time, the car dealers had been offering the insurance to the buyers via tie-up with the insurance company. It may help in saving some money but you can’t ignore the cons that come along.

Here’s a look at the pros and cons of buying insurance from a car dealer:

The Advantages

1. The process of buying car insurance from the car dealer certainly helps in saving your time as you don’t have to look for insurance companies on your own. 2. The process of buying the insurance coverage is streamlined and convenient when it is done via dealership.3. Since the car purchase and the insurance are bundled, the buyer may receive bundling discounts on the deal. Some car dealers may also waive off the first year premium for attracting the customers.4. The dealerships also offer add-ons and other services may also be bundled by the dealer.5. Most of these dealers also have a separate help desk for the insurance queries and they offer assistance for making claims as well.

The Disadvantages

1. In some cases, the dealers have their own packaged policies where certain features are simply bundled which you may not even require. However, you will still have to pay a premium that is higher than usual. 2. You will not have the opportunity to choose an insurance company of your choice when buying the car insurance in Malaysia as the dealership will have their tie-ups with specific insurance companies. You will be left with no option but to buy from those specific insurers only.3. The car dealer may not offer you the best price on the insurance policy. While you may be able to save a lot of time while making the purchase, you certainly won’t be able to save money. The car dealers work with the insurance providers on a commission basis. Thus, the customer would be paying a higher premium than what they would have paid if they chose the insurance company themselves.4. Buying insurance from dealers does not give you an opportunity to compare the plans between insurers. This is a crucial step in the process of deciding an insurance policy for you.5. The dealership may also include add-on coverage in your car insurance without mentioning or discussing about it. Thus, you need to be alert and read the policy thoroughly before signing the papers. Having add-on coverage which are not useful to you will only result in increase in the premium amount that you will have to pay without even enjoying the other benefits.

Explore the web for more information and news on detarification in Malaysia and how consumers can benefit from the same.

Peter is a technical writer and insurance customer service officer. He writes for online blogging sites mainly related to auto insurance and car insurance.