diff --git a/internal/plugin/installer/installer.go b/internal/plugin/installer/installer.go
index a6599c443..c7c1a8801 100644
--- a/internal/plugin/installer/installer.go
+++ b/internal/plugin/installer/installer.go
@@ -139,18 +139,24 @@ func Update(i Installer) error {
 }
 
 // NewForSource determines the correct Installer for the given source.
-func NewForSource(source, version string) (Installer, error) {
-	// Check if source is an OCI registry reference
+func NewForSource(source, version string) (installer Installer, err error) {
 	if strings.HasPrefix(source, fmt.Sprintf("%s://", registry.OCIScheme)) {
-		return NewOCIInstaller(source)
-	}
-	// Check if source is a local directory
-	if isLocalReference(source) {
-		return NewLocalInstaller(source)
+		// Source is an OCI registry reference
+		installer, err = NewOCIInstaller(source)
+	} else if isLocalReference(source) {
+		// Source is a local directory
+		installer, err = NewLocalInstaller(source)
 	} else if isRemoteHTTPArchive(source) {
-		return NewHTTPInstaller(source)
+		installer, err = NewHTTPInstaller(source)
+	} else {
+		installer, err = NewVCSInstaller(source, version)
+	}
+
+	if err != nil {
+		return installer, fmt.Errorf("cannot get information about plugin source %q (if it's a local directory, does it exist?), last error was: %w", source, err)
 	}
-	return NewVCSInstaller(source, version)
+
+	return
 }
 
 // FindSource determines the correct Installer for the given source.
diff --git a/internal/plugin/installer/local_installer.go b/internal/plugin/installer/local_installer.go
index e02261d59..1c8314282 100644
--- a/internal/plugin/installer/local_installer.go
+++ b/internal/plugin/installer/local_installer.go
@@ -29,8 +29,8 @@ import (
 	"helm.sh/helm/v4/pkg/helmpath"
 )
 
-// ErrPluginNotAFolder indicates that the plugin path is not a folder.
-var ErrPluginNotAFolder = errors.New("expected plugin to be a folder")
+// ErrPluginNotADirectory indicates that the plugin path is not a directory.
+var ErrPluginNotADirectory = errors.New("expected plugin to be a directory (containing a file 'plugin.yaml')")
 
 // LocalInstaller installs plugins from the filesystem.
 type LocalInstaller struct {
@@ -91,7 +91,7 @@ func (i *LocalInstaller) installFromDirectory() error {
 		return err
 	}
 	if !stat.IsDir() {
-		return ErrPluginNotAFolder
+		return ErrPluginNotADirectory
 	}
 
 	if !isPlugin(i.Source) {
diff --git a/internal/plugin/installer/local_installer_test.go b/internal/plugin/installer/local_installer_test.go
index 189108fdb..2decb695f 100644
--- a/internal/plugin/installer/local_installer_test.go
+++ b/internal/plugin/installer/local_installer_test.go
@@ -64,7 +64,7 @@ func TestLocalInstallerNotAFolder(t *testing.T) {
 	if err == nil {
 		t.Fatal("expected error")
 	}
-	if err != ErrPluginNotAFolder {
+	if err != ErrPluginNotADirectory {
 		t.Fatalf("expected error to equal: %q", err)
 	}
 }