Comparing Actual Insurance through Car Companies
There have been many posts in the forum about car insurance when purchased from outside being as low as 50% of that from the car dealer. While exploring purchase of a car I kind of dug into this a bit. I am comparing insurance from Toyota with quotes from outside. Have a feeling that the findings below will be true even from other vendors.
For those short of time in reading the entire post, here is my finding -
Insurance from outside (not the Car company) is NOT as low as it is made out to be.
With that out of the way, let's have a look at the example below for an Innova (same model):
Toyota Protect provides different Insurance covers as indicated below:
Quote 1 (Q1):
Here is the quote from Toyota Protect Luxury Plan cover:
Rs.88734 Quote 2 (Q2):
But you can get a quote of their other plans as well. Sending a sample I received below (The Luxury Plan quote does not tally entirely with the quote above as it is from another dealer but just ignore the 1% difference for now as it is not relevant to the larger discussion). Check the quote of
Premium Plan of Rs.84647 and its components.

.
Quote 3 (Q3):
Below is the direct quote from ICICI Lombard when I asked them to match the components :
Rs.78030
The difference between Q3 and Q1 is 13% but Q3 did not provide everything that Q1 provided. Is was closer to the "Premium Cover" plan mentioned in Q2 in terms of independent components in it and when compared with Premium cover in Q2 of Rs.84647, the difference gets reduced to around 5k or 8% less in Q3.
But here lies the key difference - when I asked the IDV value in Q3, it is Rs.1524570 as compared to Rs.1793000 in Q1 & Q2. This is a 17% difference in the IDV value with the Toyota Protect plans clearly superior.
Now one might ask what is the need for a higher IDV if Return to Invoice (RTI) has been taken? This is important because of two reasons:
1. All subsequent years IDV calculation is done on basis of existing IDV.
2. RTI is not given after the first few years, after which IDV is what is used in cases like total loss.
If one starts with a low IDV, once RTI cannot be taken, the amount given back by the Insurer will be low as well.
Quotes 4 (Q4):
Online aggregator Quotes: While the initial values seemed very low they do not show prices with GST and you need to add individual components to do a proper comparison. Also the IDV was extremely low here. So when the IDV increases, the premium increases as well in these portals. Not attaching anything for this as the quotes did not have inclusions comparable to Q1/Q2.
What I next decided was to check the the lowest bar in terms of price in insurance. I got quotes from an online vendor as they will be the lowest in the industry due to two reasons: lower overheads and high funding.
Quote 5 (Q):
Online vendor Acko:
Rs.61793
Here the IDV is higher than Q3 and marginally lower than Q1/ Q2 (a small margin of 1%). So the quote below looks enticing as the difference between like for like quotes is around 20%. Just that a couple of important things like Rodent cover, limitless claims are not covered in Acko at all. Also, the cashless claim is done at select garages in case of these online vendors so it is a matter of convenience of how much premium are we willing to consider for this.
Summary
- Dealer quotes are not necessarily as high as deemed to be and they drop the rates if plans are comparable :
- Dealer quotes were more expensive by 5%-13% as compared to direct insurance companies. But their inclusions were more. More importantly, even a company like Toyota across dealers was
willing to reduce their insurance amounts by this making the difference 0 !
- Dealers also had options of lesser inclusions based insurance plans which can be picked from them.
- Check IDV value and individual components for each quote that you receive and compare if that makes a quote lower.
- Online aggregators show prices without GST and then you need to start adding components in them and tweak the IDV to try and compare plans properly with the quote received from the dealer.
- Acko/ Digit are definitely lower by 10-15% as compared to the lowest reduced quotes from the dealer. They however do not include all components and there is a restriction from where the car can be repaired. The trade-off is convenience vs cost here.
While the above is restricted to Toyota, generally asking around for Hyundai, Honda seemed to be similar though I have not delved too deep into them. If others have done a similar comparison it would be great. If the sale is to be made and the SA does not get commission from Insurance, the SA would still like to make the sale. So getting car insurance rates comparable even if not same, is something a SA would like to do (unless specific dealers give funny instructions otherwise on popular models).