Buying Insurance From A Car Dealer Vs. Buying From A Comparison Website - What’s The Difference?

by SMCIB on Friday, 23 February 2024

Buying Insurance From A Car Dealer Vs. Buying From A Comparison Website - What’s The Difference?

When buying a vehicle, your primary focus is ensuring that you get the right model, at the right price and time you want. After you eventually buy it, you’ll be in a celebratory mood. And, things like insurance aren’t anything you’ll want to worry about - since they’re usually taken care of by the dealer. And why not? Buying insurance from a dealer is seamless - you simply need to make one single payment. Also, the assumption is that if the vehicle sustains any damage, you would anyway go to this dealer, who has also provided you with insurance. So, you can expect better services as a result of the relationship, right?

After the first year passes, this question usually comes up during renewals, when you realize that you have a host of options available in the open market. But then you get worried - What is the difference between buying from a dealer versus buying online from a comparison website? Are the premiums the same? Will buying outside of the dealer lead to not getting cashless claims? How can you draw a parallel between these two?

If these are the questions you too have, then you are on the right track. In this article, we’ll see a comparison between buying from your car dealer and online comparison websites.

Car Dealer

A dealership or dealer is a company that sells you the car. Dealers sell a variety of services in addition to vehicles, such as extended warranties, roadside assistance, and, of course, vehicle insurance. A lot of times, they even bundle the insurance product into the total cost when they share the quotes with you.

Online Websites

Websites of insurance brokers, web aggregators, etc. function similarly to any other online platform. They display several types of insurance plans on a single screen. You can explore, compare, and select a plan according to your preferences on their websites.

Buying From A Dealer Vs. Buying From Online Websites: A Comparison

  1. Insurer options


    Dealers act like offline agents and have tie-ups with specific insurance companies only. So, they will suggest limited (3-4 plans) options. Further, dealers may not provide detailed comparisons other than high-level information like premiums, add-ons, etc. And, when you buy from a dealer, they will determine which plans to recommend or not recommend.

    Online Websites

    These websites are open for research and comparison of a variety of insurance plans offered by several insurance companies. On these platforms, you have an option of selecting from a wide range of options. You can choose a policy and an insurance company that suits your needs and preferences the best.

  2. Premiums


    This is where things get interesting. Because the product is bundled, you may not care how much premium you are paying. Dealers work with insurance companies on a commission basis - and hence, they may not offer you the best price on an insurance plan. Usually, the premiums charged by a dealer for an insurance policy may be higher than what you would pay if you bought the insurance through another channel.

    Online Websites

    Online platforms like web aggregators, brokers, etc. also work on commissions. But, since they are an open marketplace, there can be insurers or plans that may offer better, more competitive rates than dealers. So, you may get comparatively better discounts on online platforms. Also, as we mentioned earlier, they may provide you with a wider choice of insurance companies as well as policies.

  3. Claims Experience


    Generally, dealers also have their own workshops. In case you visit the same workshop as the dealer, you may develop a better relationship with them and hence, obtain better services. Although your dealer may offer you this as a pitch, in reality, this is not a significant differentiator to worry about. Dealers provide seamless cashless services for any insurance company they have cashless tie-ups with, regardless of whether you purchase the policy from them or not.

    Online Websites

    Brokers and web aggregator platforms, of course, do not have their own workshops. So, you will have to go to your choice of workshop, where a cashless facility is available, and get your car repaired. You can contact the call center of your insurance company and check which are the nearest workshops that provide cashless repairs.

It’s a common myth that dealers don't provide good services or cashless treatments if you don’t buy an insurance policy from them. This, however, is not true. Repair work accounts for a sizable portion of a car dealer's revenue and this is a competitive sector. So, dealers won’t risk providing you with a bad experience and losing you as a customer for life.

In our own experience, we have seen that car workshops, at the time of claim, do not care about whether you bought the insurance from them or elsewhere. So, things don’t change much. In case of a claim, you can go to a cashless workshop listed on the insurance company's website, or contact customer service or toll-free.

Wrapping up!

These are some of the differences between buying insurance from a car dealer and buying through online comparison websites. Regardless of where you purchase your insurance coverage, make sure it suits your needs and is tailored to your preferences.


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