Insurance - Free Rides?

During festivals and even during low sales period, car dealers dole out free car insurance offers.

This is just the regular car insurance policy. We offer it so that the customer doesn't have to run around for insurance. Most of these schemes are for one year, however; for the products of select auto manufacturers, a two year insurance is also being given free of cost.

When car manufacturers or dealers want to offer discounts, they say we will offer you insurance for free. So, instead of reducing the price on the vehicle, the dealer will tell you to pay the value of the car and that the insurance part will be taken care of. You don't pay the premium and the manufacturer or the dealer pays it in the form of discount. Remember, however, that such covers' ambit is restricted only to mandatory car insurance coverage.

So, if you want any add-on covers, you can buy that separately. If you want the person in the car who is injured to be taken to the hospital or that the vehicle price does not depreciate, then these add-on covers can be taken on the same policy.

If you are keen on buying such policies, don't forget to scrutinise the policy document and ask for the detailed policy wordings. For instance, keep an eye on the IDV (insured declared value); it should not be lower than 15% to 20% of the invoice value. Also, check how the dealer will pay for the second year's insurance coverage as car insurance policies are to be renewed after a year. Ask for the breakup of car registration fee, as some dealers may charge higher registration fee to camouflage the free insurance offer.

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