January 20, 2026
Unlike vehicle price, trade value, monthly payment and financing terms, insurance has lived on the sidelines when it comes to closing the deal. It’s largely something the customer handled on their own, often after the paperwork was signed.
That model no longer reflects how customers shop for or buy cars.
Insurance has quietly become a core part of the customer experience and a decisive factor in whether deals move forward smoothly or stall at the finish line. Dealerships that treat insurance as an afterthought are increasingly paying for it in lost momentum, delayed deliveries and, in some cases, lost sales.
Customers expect insurance to be included in process
Modern car buyers do not separate insurance from the purchase decision the way the industry has historically. Most shoppers now research insurance early in their car search, often alongside vehicle pricing and financing options.
They walk into the dealership with expectations about coverage, cost and what they believe their total monthly payment should look like. In fact, our 2026 study shows that 65 percent of Gen Z and millennial shoppers said the cost of auto insurance affected their decision on which vehicle to purchase.
Yet many arrive at the dealership less prepared than they think. Our research also shows 1 in 5 buyers shows up without active auto insurance. For younger buyers, that number is even higher. What’s more, those who do arrive with insurance often do not have the best price, and that impacts their car-buying budget.
The hidden friction dealerships underestimate
Dealerships are accustomed to managing objections around price, payment and credit. Insurance friction, however, often appears late in the process when expectations are already set and patience is thin.
The impact is more significant than many retailers realize. More than one-third of car buyers say they have delayed or walked away from a purchase because they couldn’t get insurance confirmed in time, according to our 2026 study. Among Gen Z and millennials, that figure approaches half of buyers.
These aren’t hypothetical objections or “think it over” moments. They are deals that slow down or stop altogether because a necessary step couldn’t be completed when it mattered most.
This is where insurance shifts from compliance – still extremely vital – to customer experience. A delayed delivery or an extended wait to finalize paperwork leaves a lasting impression on customers and can be a drag on dealership profitability, even if the sale eventually closes.
Confidence doesn’t equal best deal
Complicating matters further is a wide gap between perception and reality. We found that nearly 4 out of 5 buyers said they arrived at the dealership confident they already had the best insurance rate.
But when given the opportunity to compare options during the deal, the majority — 68 percent — ended up finding meaningful savings compared with what they were already paying for insurance.
That discovery does more than lower the monthly bill. It reduces anxiety at the point of purchase and reinforces trust in the dealership experience. Customers feel reassured they aren’t leaving money on the table and that the dealership provided a solution to help them navigate a confusing part of the transaction.
Importantly, this is not about pushing insurance products. Dealerships are not allowed to sell insurance. It is about giving buyers clarity and control through insurance partnerships at a moment when uncertainty can derail an otherwise solid deal.
The experience gap is now a competitive gap
Dealerships lose customers when friction appears in the sales process and there are no great solutions to resolve that friction for the customer. Insurance has become one of those moments. Buyers expect it to be addressed quickly, digitally and without hassle. When it isn’t, they feel disconnected immediately.
The dealerships adapting fastest aren’t trying to become insurance experts. They are simply acknowledging how buying behavior has changed and aligning their process accordingly. They treat insurance as part of the buying journey, not an external task customers must solve on their own.
The result is fewer stalled deals, faster deliveries and a more confident buyer at the finish line. Our study also showed that 3 out of 4 buyers would give the dealership a higher customer satisfaction score if they could save money on insurance while there.
Standing still is the real risk
Insurance isn’t a new part of the car deal. What’s new is how directly it affects customer satisfaction and deal velocity.
As affordability pressures persist and buyers continue to scrutinize their total monthly costs, insurance only will become more visible — and more consequential — in the showroom.
Dealerships don’t need to overhaul their business to respond. But they do need to recognize that having an in-dealership insurance solution has shifted from a “nice-to-have” convenience to a baseline expectation.
The auto retailers who win in the future will be the ones who remove all the reasons for a customer to hesitate, wait or walk away.
Mike Burgiss is CMO at Polly, an embedded insurance marketplace for automotive dealerships.
Tag(s):
News