They are responsible if they sell you a car that does not have clear title or is not as described, so they are the party that benefits from any purchased indemnity. They would still be responsible even if you said you didn't want the 'indemnity'. If they want to limit their risk, they should be paying for it.
You could just take the pragmatic view and decide whether the car is worth what you are being asked to pay.
I would tell them to shove it, and tell all my friends.
You pay top price to a dealer because you expect them to stand behind a car if anything goes wrong. Clearly, they are not interested in looking after customers once they have their money; and adding to the advertised price is sharp practice.
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