Owning a car was always a dream for me and so when my husband suggested we invest in one this festive season I was over the moon. We identified our budget and began searching for that perfect car for our perfect little family. Online price and feature comparisons, taking test drives and bargaining with various dealers finally paid off and we landed at one of the shortlisted dealership. While I admired the various models on display, my husband took a long time getting to know the nitty-gritty of the models. While the technical specifications and features escaped my limited knowledge, the insurance context attracted my attention to which I had a long list of questions for the dealer’s executive. After both our questions were answered, we settled on the car and deposited the down-payment.
Buying a car, for everyone, involves a lot of contemplation before a purchase is made. After all, a lot of money is spent in buying the car, isn’t it? Along with your new car, comes a car insurance policy, something which you cannot avoid.
However, there are some insurance questions which should be asked from our dealer, like I did, when buying a new car. Here is a list of 3 most important ones:
Q#1 – What is the final on-road price of the car?
In all the promotions and advertisements which you see for the car, the ex-showroom price of the car is displayed. However, that is not the price that you have to shell out to buy the car. The price which you end up paying for the car is higher than the ex-showroom price and is called the on-road price of the car. The ex-showroom price of the car is the price at which the dealer acquired the car from the manufacturer and also includes any taxes the dealer might have paid to the Government for such procurement. To this price, the dealer’s profit margin, road tax, registration charge, insurance charge and other logistics charges are added to arrive at the on-road price of the car. So, inquire about the on-road price of the car and the components added to arrive at the price.
Q#2 – Is insurance included in the on-road price? If yes, what are the specifications of the policy?
It is a common practice among dealers to bundle a plan of car insurance into the car’s other cost components to arrive at the on-road price. You should particularly inquire about such plan addition. If the dealer has not attached an insurance policy, the onus is on you to get one and attach it your car. If the dealer has included an insurance policy, as is generally the case, knowing about the policy is important. Most of us ignore the details and pay up the on-road price without much consideration, which is wrong. Knowing your insurance details is very essential if you want the best policy for your car. Here are some pointers which you should check in the policy’s features:
- The Insured Declared Value (IDV) – the IDV is the market price of your car adjusted for any applicable depreciation. Since you are buying a new car, the IDV should be the existing market price of your car. Check for the IDV quoted in the plan.
- Coverage features – enquire about the coverage aspects of your plan. Find out if there are any inbuilt riders, like a zero depreciation rider, or any other attached or attachable riders, etc.
Q#3 – Can I avail the No Claim Bonus (NCB) discount of my earlier policy in the new policy?
If you are buying another car, you might have a NCB discount from the policy of your previous car. This NCB discount lowers the car insurance quotes if carried forward to the new plan. So, explore the possibility of carrying forward any unexpired NCB of your previous policy.
These questions are the rudimentary questions which you should ask your dealer when buying a new car. The car’s features are important but so are the features of your car insurance policy, isn’t it?