India produced 18.5 million two wheelers in 2015. The growth is fuelled by a growing middle income population across B & C category cities, as well as government support on “Make in India”. A lot of foreign companies are attracted to increase their investment, or do fresh investment to make their products in India. As a result, the indian consumer is spoilt for choice. The price conscious Indian consumer is also enjoying the price wars between indian auto giants and the new multi national corporations.
With good credit growth, Indian financial institutions are also contributing to the boost in growth numbers. Long term loans are easily available to the average consumer for purchase of 2 wheelers. The auto dealers are the focal point of all these activities, as they channelize all these factors to the consumers, helping in their purchase decisions. While this is good, in all other sense, one factor which remains largely ignored is that some of these dealers also tend to push very high insurance premium rates to the customer.
In the name of “direct from bank rates”, these dealers give a perception to the ignorant customer that there is no possibility of a second option, when it comes to deciding insurance policies. This is completely against the notion of Insurance product being a matter of solicitation, where decisions cannot be pushed.
It is a fact that a mind boggling majority of insurance policies for new vehicles are taken from the dealers, and it is also a fact that the market rates for those policies is lower than what the auto dealer “sells” at. To illustrate :
Suppose you are buying a new honda bike from a dealer. As a new product, with a certain IDV, a certain value is quoted as premium by the representative of the dealer. If you check the same product online, with the same specification, you will see at least a 30% reduced premium amount. It is therefor , for the indian consumer to be aware about.
What steps to take to get a low premium amount :
1) Never give in to the bundling technique of sales rep. They try to attach the higher premium purchase with everything else that is completely disconnected. like, they would say, you need to take the insurance from us for getting the bike delivery on time. – This is as senseless as it can get. For new two wheelers, you can get a cover note in half hour from any aggressive portal or insurance advisor.
2) They will say, if you sign on this insurance document, then we can send you vehicle details for government registration. This is also not true.
3) Before or during your 2 wheeler purchase decision, you need to put the desired details on online portal like us, and let us assist you with a reasonable premium amount. In the remote case, that it is higher, you can obviously go back to your dealer representative.
By doing this, you keep the choice in your hands. Which itself is what we desire, as a Indian consumer.