How Dealers try to cheat
How to avoid pressure tactics to pay money
All excited to book and awaiting you turn for being allotted a car? Here are some places where you might need to be careful. Remember, dealer is a business to make money. Not all are ethical and customer friendly.
Never take insurance from the dealer. Always buy from outside. You may approach the direct sales call center and get a much much cheaper quote. Dealer cannot compel you to buy from them. You'll save a lot.
Do take the effort to go the yard, check the vehicle in person and then give the go-ahead to do the registration formalities. DO NOT accept pictures of the car. All cars look the same. Don't forget to take picture of the VIN # and send it to the dealer. This way you have proof of the car you selected. There are instances where dealer took money from the customer and sold the selected car to an influential person like "police", "politician" or local "goon".
Car In-Transit tactics:
Many dealers say that the car is in transit & will reach your city the next day. They will pressurize you to make full payment, else threaten you by saying your booking would be given to the next person in the queue. These are all pressure and sales tactics to get your money. Don't pay a rupee before seeing the vehicle. If you pay, you might get to hear diplomatic answers like truck is broken-down, factory didn't send the specific variant you booked, the car expected to be allocated to you was found damaged and sent back to the factory, factory sent petrol engine instead of diesel etc. Dealers will rotate the money. Don't fall for these tactics
Dealers are paid a commission / charge by the company to hand the vehicle over to you. Dealer is neither doing you a favour nor a gratitude by doing registration. He is expected to do the same on your behalf. Dealers levy a handling charge citing godown charges, fuel, RTO charges, driver expenses etc but trust me all are covered. Whatever they take from you is an additional expense. It is illegal to collect handling charges from customer and there is also a court ruling on the same, favouring the customer.
Registration Fees / RTO Charges:
The amount the dealer collects must be equal to the mount paid at the RTO towards road tax & registration. Any additional amount collect from you is illegal. This includes, driver expenses, fuel expenses, document photocopying, filing documents into a paper folder, bribes etc. Don't pay additional charges.
Fastag, the automated toll collection prepaid card is compulsory for all vehicles sold out the showroom. You are free to choose your preferred vendor from the market and its not compulsory to buy from the vendor that the dealer offers. Example, my entire financial portfolio is with HDFC Bank. I have the option to buy a fastag from HDFC bank even-though the dealership has a tie-up with ICICI Bank.
The Fastag Overcharging Scam:
I have noticed that most dealers charge 600/- for Fastag. Out of 600/-, 100/- is credited to the account. Now, If you check the website of the provider, the cost of Fastag is 300/-. The split-up cost of Fastag is Rs 100/- is the Issuance fee, Rs 100/- is a security security deposit and Rs 100/- is credited to the Fastag account for consumption. So in reality, Rs 200/- is the non-consumable fee. When the dealer charges 600/- , They should credit 400/- into the Fastag account. So, Is this not cheating? We are paying 300/- extra to the dealer, for no added benefit. Do fight it out with your dealer and ensure you aren't cheated.
Unfortunately, the dealer credits only 100/- into the account. If the dealer denies it, escalate to email@example.com or politely tell them, you will take a Fastag on your own and provide it to them before RTO formalities are done.
Additional Financial products tagged along:
It is a very common complaint with people that many dealers, some dealers have sold customers that it is compulsory to buy the credit card too. This is totally optional and at your discretion on whether you buy or not. Examples are Maruti Nexa HDFC Credit-card, SBI-Maruti credit card. Remember you are buying a car and no one has the right to cross sell you any other product. On most cases these cards aren't lifetime free and they don't carry rewards that other credit cards offer.
Rewards Card / Loyalty card:
If you are opting for some rewards / loyalty cards like Maruti Autocard, remember to check that the mobile number and registration number are yours and not someone else's. You will lose out on benefits without your knowledge ad it is really difficult to get back those points. There are cases on the internet, where dealers have updated their mobile number and not the customer's.
How to Avoid dealer tactics in forcing to pay money before PDI:
First things first. Dealership is a business and their sole aim is to make money. As I have mentioned in earlier articles, unlike foreign countries, dealers needn't be ethical or honest. As a strict rule, do not pay without PDI.
A dealer pre-pays and buys your car. Example, for a car with ex-showroom price of Rs. 100/-, dealer will have to pay Rs. 90/- to Tata, get the car and sell it to you for Rs. 100/-, thereby making a profit of Rs. 10/-. Now, the dealer may put pressure on you to pay, citing that your vehicle is loaded on the truck and will reach in 3 days. They will ask you to make full payment now, today.
What you need to do beforehand:
Get a pre-approval of your loan from your preferred financier and email the confirmation of approval of the loan amount to the dealer. This will give confidence to the dealer that you are serious about taking delivery. Many customers start paperwork only after the car has reached the dealer. This is ethically incorrect. The loan workflow should be in pre-disbursement stage, awaiting your confirmation for disbursal. Upon confirmation, most financiers disburse the money to the dealer electronically in 2 hours.
Tactics used by dealer:
If you don't pay, we will delivery your vehicle to the next person in que.
No customer asks for PDI, why are you asking?
We have already done PDI, factory already has done PDI, why do you need to do PDI? All Nexons are same.
Yard is very far from here. Why do you want to take so much trouble. We are there for you.
Customers are not allowed inside the yard
Tactics we can use against the dealer:
Tell the dealer that the fraud team from the financier called and asked you, whether you have seen the car. Tell them you said no. Then tell that the fraud team suggested you to look at the car at the dealer's yard/showroom and then ask for releasing payment. Tell them it is logical and also as an anti-fraud measure by the financier.
When you buy a chocolate for Rs. 1/-, it is shown to us and then payment is collected for it. So, when buying a 10 lac rupee car, shouldn't the customer be allowed to see the car before payment? Tell the dealer that every car is same but VIN number is different. Dealer cannot argue anything for this point.
Tell the dealer, if disbursed, you yourself are responsible to pay EMI and financier won't accept any excuse, if car is found to be unsatisfactory. You don't want to start the EMI burden without being 100% sure of the vehicle.
Tell the dealer distance is not a problem. PDI is fore more of a visual check and not driving check.
If dealer tells customers aren't allowed, tell them to being the car to the showroom or else tell them that you want to do a visual PDI only and don't want to drive the car. Dealer is right here, as many customers are first time drivers and there is a risk of the customer damaging other cars in the yard due to driving error/ fault of the customer.
If they play tactics, escalate to firstname.lastname@example.org. It is very effective.
You can tell them that pre-approval is already sent to the dealership earlier, and after successful PDI, you will email the financier to disburse, who will disburse the money to the dealer electronically within 2 hrs or a reasonable timeframe.