Is it mandatory to purchase insurance when financing a car at a 4S dealership?
2 Answers
Financing requires purchasing full coverage insurance at the 4S dealership. Below is relevant information about auto insurance: 1. Compulsory Traffic Insurance: The first insurance to purchase is compulsory traffic insurance, which is legally required when buying a car. Without it, new drivers cannot license their vehicles, and experienced drivers cannot drive on the road. Driving without compulsory traffic insurance will result in severe penalties. 2. Third-Party Liability Insurance: This insurance covers compensation for bodily injuries or direct property damage to others caused by accidents involving the insured vehicle during use. Accidents are the last thing anyone wants while driving, as they not only damage one's own car but also require a significant amount of money to compensate others. 3. Vehicle Damage Insurance: Commonly referred to as collision insurance, this differs from vehicle downtime loss insurance. It covers losses to the insured vehicle caused by natural disasters or accidents within the insurance's scope of liability, providing corresponding compensation. However, it does not cover losses caused by earthquakes.
I've financed several cars at dealerships, and each time I was required to purchase full coverage insurance—it's a lender requirement to protect their asset in case the car is damaged or stolen, which would depreciate its value. Without insurance, the loan might not be approved, or the bank could demand immediate repayment later. I recommend reviewing the loan contract first, as it clearly outlines the insurance terms—don’t hesitate to ask the salesperson for details. Some dealerships bundle insurance at a higher cost, but you can shop around with other insurers for full coverage at a better price. Remember, insurance isn’t just mandatory—it can save you money by covering major repair costs if an accident happens. Bottom line: don’t skip insurance when financing a car—safety comes first.
