Is it better to go with dealer-provided insurance, or with a third-party provider?

Whenever you are buying a car with cash or with a financing deal, be sure to set aside some cash to avail of other necessities like registration and that all-important insurance policy. 

Depending on your transaction, you may go with either in-house insurance or you can supply your own provider. In some cases, a promotion will require you to go in-house or with a designated provider to get the promotion that you want. However, let’s say that you have the liberty of choice, what’s the better option? Going in-house, or getting your own provider? 

In-house insurance providers include any dealership or brand-partnered provider. Big brands may have their own in-house providers, such as the case with Toyota Financial Services Corporation. From financing deals to insurance policies, brands with in-house providers can provide coverage for your vehicle as soon as your car gets released from the dealership, and it’s what a good portion of customers go for.  

The pros of going for the in-house deal include convenience, speed, and availability. As soon as you’re interested in a model, you will know exactly how much it costs to insure the vehicle and how much you need to pay on top of it to secure the policy. Speed-wise, you can get your policy as soon as you leave the showroom with your brand-new unit, and the policy is readily available and can be applied as soon as the payment is made and the car is released. 

Meanwhile, the cons of going in-house will be with regard to flexibility. More often than not, the coverage that you will get will include basic items like repair and replacement of parts in the event of an accident among other items, but it’s uncommon for you to be able to put a bunch of add-ons for your policy from an in-house dealer policy. 

Price-wise, however, in-house insurance tends to be more expensive due to its convenience. That’s what you pay for anyway when going in-house for your insurance policy, convenience. There is no need to go outside of the dealership anymore or come prepared with a policy provider ready to give you what you need. Just bring whatever cash you need to transact and it’s done. 

Going beyond the confines of a dealership’s policies can help you save a considerable amount of money. Third-party providers will often field competitive rates either because that’s their specialty or they’re looking to go up against the convenience of a car dealer’s insurance. In general, a third-party provider has the potential to give you a better deal compared to a car dealer’s rate. 

There are several pros when dealing with a third-party provider. The first is that you will be afforded a lot of flexibility when it comes to coverage. If you want to increase your coverage, it’s no problem. Want more add-ons? You got it. Do you want to shop for a company with a better rate? No problem. 

Also, third-party providers tend to have more specialized services that may include towing and vehicle recovery should your vehicle end up stuck. On top of that, making a claim can be easier with a third-party provider as the flexibility of your policy can allow you to make claims that might not be covered with a standard insurance policy from the dealer. 

Plus, there is a myriad of companies that you can choose from, and each has its own rates and packages that you can inquire about and choose from. This allows you to tailor your policy to your budget and to get the kind of coverage that you want. 

The only question is who will you go with? The cons of going with a third-party provider are that you will have to do a little research and shop around for the best insurance policy. Following that, you need to make sure that you’re going with a reputable company that knows what they are doing, otherwise, your money is better spent elsewhere. 

You can’t argue with the convenience of an in-house dealer-provided insurance policy. All you have to do is show up and pay the premium and you’re ready to go. The cons are that you will be paying a sum for that convenience, and it’s not going to be that cheap. The issue with dealer-provided insurance policies is that the coverage is also not as flexible, thus making a claim for a specific kind of accident could be a little tricky.

That being said, you have to do a bit of research if you want to go with a third-party insurance provider and you might have to ask around a bit in order to get a good idea of what rates and packages are available for your specific model. 

Researching doesn’t have to be all that tedious, however, and all you have to do is go to our insurance calculator in order to find out what companies have policies for your model. Getting insurance for your vehicle doesn’t have to be all that complicated and you can do it with a couple of swipes and taps in our calculator. Once you are armed and ready with your policy, be sure to mention to your dealer that you will be going with a third-party insurance provider on your next purchase.