Get 5% off in-app
400k+ download
Open app

Pros and cons of car insurance from car dealerships

  • Auto Insurance
  • Xavier Sabastian
  • 5 minutes

Spread the love

Nothing beats the thrill of discovering your ideal car. However, if you do not have adequate car insurance, you will face significant difficulties. We are frequently asked at Way.com if car insurance is offered at various car dealerships.

Car insurance from dealership

What kind of insurance does a car dealership need?

Insurance for car dealerships does not fall under the definition of “standard car insurance” or personal vehicle insurance. This type of insurance is also distinct from commercial vehicle insurance. Insurance for car dealerships is the type of insurance required by automobile dealerships. It is designed with dealerships in mind. The following are the different kinds of coverage you can get for your auto dealership insurance requirements:

  • Commercial general liability insurance
  • Employment practices liability insurance
  • Errors and omissions insurance
  • Business income insurance
  • Worker’s compensation insurance
  • Garage keeper’s liability insurance
  • Garage liability insurance
  • Dealer plate insurance

Car dealer’s insurance policy

Suppose you think that your car dealer is the only place where you may get car insurance. The answer is a big blatant NO. Aside from the common idea that you can only buy car insurance from your car dealer, it is also a myth that it is the only way to get car insurance.

Most people prefer it because it is less time-consuming to purchase. After all, you do not have to research and evaluate the various insurance options accessible. The auto dealership that you visit serves as a vital link between you and the insurance company. They also provide seemingly unimportant things such as auto covers, free services, and so on.

But hold on! But there’s a catch. Your car dealer may take care of everything for you, but it will cost you money. Because your auto dealer arranges all of your car insurance needs from the ground up, your rate will immediately rise. 

In comparison, if you can spare some time to look over the features of each car insurance policy, ideally online, you will almost certainly find a better offer. Not only that, but you’ll have the freedom to select the add-ons that are most useful to you. That is, of course, preferable to having to take the ones you don’t need but still have to pay the premium for.

Do I need insurance to buy a car from a dealership?

Yes. You should always have insurance before you buy a car, even if a dealer will let you buy one without it. You can’t drive off the lot until you show proof of insurance, according to the law.

How much does dealer insurance cost?

Insurers typically charge less than $50 per month, or $576 per year, for general liability insurance. Third-party bodily injuries and property damage, as well as advertising damages, are covered by this policy. Let’s look at the benefits and drawbacks of obtaining automobile insurance from your dealership:


  • It does not necessitate the car owner’s active participation in the transaction. Everything is done on your behalf, from browsing for vehicle insurance plans to understanding the features and benefits they provide to making an informed decision. Is there anything more convenient than this?
  • Bundling discounts are frequently available when buying a car and an insurance policy from the same auto dealer. The support is not limited to the purchase procedure; it also extends to after the purchase. 
  • If the necessity arises, your motor dealer may also be able to assist you with claim settlement.
  • You can contact the automobile dealer for further information on the coverage or file a claim. In such cases, the dealer may be able to assist you effectively.


  • An auto dealer will not be able to provide you with as many car insurance plan selections as you would otherwise. Every auto dealer has a partnership with a few insurers, and customers who buy automobiles from their showroom can choose from various vehicle insurance options. As a result, the auto insurance coverage accessible to car buyers is limited to these insurance firms solely. This reduces the number of insurance firms and programs available to auto buyers. 
  • When you buy car insurance through your auto dealer, premiums are higher, often by as much as 40% higher than online prices. The increase in charges is due to the commission paid by the insurer to your auto dealer for making the vehicle insurance plan easily accessible to you. This has an impact on the cost of your coverage, resulting in increased premiums.
  • Your auto dealer’s add-ons may not be appropriate for your specific needs. However, you have no choice but to pay a premium for each of the add-ons, which is also the basic comprehensive plan’s cost. When you buy vehicle insurance online straight from an internet broker or insurer, on the other hand, you have the option to choose the add-ons you desire. Furthermore, you have the option of not purchasing any add-ons.

Bottom line:

Purchasing automobile insurance through your car dealer or straight from an insurance company has benefits and drawbacks. You can weigh the advantages and disadvantages of both solutions and choose the one that best matches your needs.

car insurance dealership

Here’s more info on top-rated airport parking, the best parking spots in your city, the most affordable insurance for your car, and top-rated car washes near you.



Related Posts


Press ESC to close