Did the car dealer sell you insurance too?
Add-on insurance sold alongside a car is usually poor value, and there is a process for getting a refund on one you should never have been sold.
Poor value
the ACCC's Moneysmart says add-on insurance sold by car dealers is usually poor value for money
What this is
Add-on insurance is sold in the finance office after you have already decided to buy the car, at the point where fatigue is highest and comparison is impossible. Moneysmart is blunt about why it is usually poor value: salespeople can overload you with information and choices, and may steer you to the products that pay them the most. The cover itself is often duplicated by rights you already have or by insurance you already hold, and when it is rolled into the loan you pay interest on it for years.
Does it apply to you?
- Anyone who bought a car on finance from a dealership
- Anyone sold gap cover, loan protection, extended warranty or tyre and rim cover at the point of sale
- Anyone still paying for cover on a car they have since sold
How to do it
- Dig out the paperwork from when you bought the car. Add-on cover is often bundled into the finance rather than listed as a separate purchase.
- Identify what you were sold: gap or loan protection, extended warranty, tyre and rim, consumer credit insurance.
- Ask whether you actually needed it and whether you were told you did. Moneysmart has a page on getting an add-on insurance refund.
- If you were pressured or misled, complain to the insurer in writing, then to AFCA, which is free.
Where people lose the money
Assuming it is too late because it was years ago.
There is a refund process, and AFCA can consider complaints about how a policy was sold.
Only checking the premium.
If it was financed, the real cost is the premium plus years of interest on it.
Buying it because it was presented as a condition of the finance.
Add-on insurance is optional. Being told otherwise is itself a reason to complain.
Questions
What counts as add-on insurance?
Cover sold alongside the car rather than separately: gap or loan protection, extended warranties, tyre and rim cover, and consumer credit insurance that pays if you cannot repay the finance.
Can I get a refund?
Moneysmart has a page on how to seek an add-on car insurance refund. If the insurer refuses and you believe you were misled or pressured, AFCA can consider it, free.
Is it ever worth having?
Sometimes, which is why the wording is 'usually poor value' rather than 'never buy it'. The test is whether it covers something you actually face and are not already covered for, at a price you could have compared.
Where these numbers come from
- Moneysmart (ASIC), Add-on car insurance · read 2026-09-23
Last gone over 2026-09-23. Figures change; the link above is always the current one.
Published by Income Lab, Melbourne. Responsible for this page: Jarred Krowitz.