Over one in three Americans—and half of younger generations—are open to buying car insurance through a dealership or manufacturer rather than an agent, according to a J.D. Power study. This product, called embedded auto insurance, is a convenient way to buy coverage. But there’s such a thing as too convenient. Here are the tradeoffs to consider so you don’t get a bad dea💦l.

Understanding Embedded Insurance 

Embedded insurance is coverage that’s sold directly with the pro🐭duct or service you’re insuring. In the automotive space, that means getting a policy from the dealership, auto financer, or the car manufacturer when you buy your car.

Tesla, for instance, was an early adopter of embedded car insurance, launching its 澳洲幸运5开奖号码历史查询:Tesla insurance line for select models in 2019. Online car marketplace Carvana, meanwhile, partnered with the technology-oriented Root Insurance firm in 2021 to offer auto coverage for used vehicles at checkout. GM and Stellantis, which 🍎owns Jeep, Chrysler, and other top car brands, have also launched embedded insurance progr🍒ams in recent years.  

The companies leading the way with embedded insurance tend to be niche, data-focused players. “The concept has gained more traction among upstart producers who collect more 澳洲幸运5开奖号码历史查询:telematics data, proꦯduce fewer vehicle models, and target a demographic that values the convenience of having a one-stop shop for purchasing a car,” 𝓡said Jonathan Ernest, assistant professor of economics at Case Western Reserve University. 

The Appeal for Young Adults

That target demographic skews young. The J.D. Power 2025 U.S. Insurance Shopping Study found that 47% of millennial and Gen Z customerಌs showed interest in embedded car insurance, compared to 35% of Gen X and 19% of baby boomers and pre-boomers. Overall, 37% of Americans would consider buying embedded car insurance.

“Younger consumers are more open to trying an ♌emerging chan🌺nel,” said Stephen J. Crewdson, chartered property casualty underwriter (CPCU) and senior director of insurance intelligence at J.D. Power. “They don’t have decades of experience with their agent, so they’re not as attached.”

They also typically have fewer assets and so don’t already have homeowners or renters insurance 澳洲幸运5开奖号码历史查询:to bundle with auto insurance for a d🎃iscount, said Janet Ruiz, director of strategic communications at the In⭕surance Information Institute. 

Past studies have linked embedded insurance’s youthful appeal to convenience. Polly, an insurance agency that markets insurance policies to auto dealerships, found that 81% of Gen Z and millennials would like the option to purchase insurance while buying their car.  

Pros and Cons of Buying Insur🗹ance Throug𝕴h Car Dealers

Pros Explained

Effortless Purchase Process

Convenience repreไsents one of embedded auto 𓆉coverage’s most significant upsides.

“Insurance is arranඣged instantly at the point of sale, providing seamless coverage without requiring separate follow-up or paperwork,” said Steven Cegelka, chief operating officer at Ignition Dealer Services.

Bundled Discounts and Affordable Rates

Buyers may save money, as some lenders could offer a bundled discount or lo🔯wer rates if the customer opts for an embedded insurance policy. 

Potentially Faster Claims

You also may 🌊encounter faster claims processing as providers often use automation and pre-authenticated customer data in their app or system.   

Often the Same Coverage Tr🌳aditional Insurers Offer 

Beyond that, the diffeಞrences in qꦓuality and price between embedded and traditional coverage can be negligible. 

“The insurance that’s offered by a dealership or car ma𒉰nufacturer is usually very similar to any auto insurance products you’d get” through traditional channels, Ruiz said. 

In fact, dealerships and manufacturers often offer embedded coverage in partnership with an established carrier. Nationwide, foඣr instance, underwrites the policies for✤ the Ford Insure and Lincoln Motor Company Insure programs, while Farmers Insurance Group companies underwrite Toyota Insurance policies. 

Cons Explained

May Discourage Comparison Shopping

The ease of p𝕴urchase could d♛issuade you from taking some important steps.  

“You're sitting there in the dealership, about ready to make a major purchase,” said Brian Moody, senior lead editor at Autotrader and Kelley Blue Book. “You might not have the time or frame of mind to do your own research.” 

Research is especially important when it comes to 澳洲幸运5开奖号码历史查询:car insurance, as policies carry a lot of fine print, and you wantꦕ to make sure you have adequate coverage. 

Limited Carrier and Customization Options

Prices are heavily influenced by your personal profile, including age, gender (in some states), driving record, and credit history. If the dealer or man▨ufacturer only offers insurance through a single carrier and that carrier doesn’t offer favorable rates to drivers with your profile, you could miss out on a more affordable policy. 

“Some buy💝ers may benefit from comparing quotes separately,” Cegelka said.  

Some Discounts Could Be Missed

While manufacturers or deal🍨ers may have dis💦counts, their discounts might not be as favorable as you could get elsewhere. If you’re not comparison shopping, you won’t know.

Tips for ℱBuying Insur൲ance Through a Dealer or Manufacturer

Fortunately, there are wꦗays to ensure you’re getting good car insurance at the point of purchase. 

• Ask questions. “The devil is in the details,” said Peggy E. Stover, associate professor and director at the University of Iowa’s Tippie College of Business. So, “ask a lot about what is and what is not covered.” Make sure, too, that you know which carrier is underwriting your embedded policy. 
• Research the insurer’s reputation. Newer market entrants may have unproven staying power. “You don’t know how long these companies are going to be around,” Stover said. Get a better idea of the embedded insurer’s financial strength by investigating its ratings with independent agencies, like 澳洲幸运5开奖号码历史查询:A.M. Best, Moody’s, S&P Global, and Fitch.   
• Get online quotes from multiple insurers before car shopping. “They aren’t always completely accurate, but they give you a general range” of what you’ll qualify for, Ruiz said. These quotes will help you understand if the dealer's or manufacturer’s offer is competitive. 
• Understand what discounts you qualify for. “Make sure you're not missing any through the embedded insurance,” Ruiz said. This step is critical if you have homeowners or renters insurance and would be foregoing a generous bundling discount by opting for a different carrier. It’s also important if you have other vehicles in your household and may otherwise qualify for a 澳洲幸运5开奖号码历史查询:multi-car discount. 

The Bottom Line

Embedded car insurance is growing in practice and gaining traction with younger car shoppers who appreciate convenience and aren’t yet married to a particular insurance company. While these policies are often similar to their traditional counterparts, price and quality vary by provider and driver. If you're considering embedded car insurance, get quotes from multiple insurers and understand your coverage needs before buying from the dealership, manufacturer, or auto financing company.