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Old 5th February 2009, 16:22   #1
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Default *SCAM* Alert : Dealerships overcharging RTO / Road Taxes

For sometime now, I have been thinking of getting a small car as a town-runabout. Mainly to be used by my wife and occasionally by me/Dad. Could not decide between the M800-a/c and Alto-Lxi and due to some reason this kept getting postponed. Had initially planned to get it in end-Nov '08, then X'mas '08 and now we are in Feb '09, but still pending.

The idea was to buy it in Kerala, since that is where it would be used, but I found that my weekend visits did not allow me enough time to check out the cars or to finalise a good deal with the dealer. Only managed to get quotes for both the cars there.

Then I thought it would be more easier for me to buy it in TN and drive it down, because I have more time during weekdays to finalise the deal. Ofcourse the hassle would be that it would be a TN-regd car running in KL.

Anyway, I land up at the showroom of CARS India (MSIL dealer) last week and get quotes for these 2 cars. This is the quote he gave me for the Alto-Lxi :

Ex-showroom : 2,72,568.14
Insurance : 7,991.00
RoadTax, Registration, number plates, handling charges + basic accessories : 31840.00
-------------
Total : 3,12, 399.14

The first thing that struck me was that the price seemed so much higher than the on-road price quoted to me at Kerala, which was 2,95,936. Since the ex-showroom price and Insurance seemed OK, I narrowed down the difference to the tax part.

I asked him what %age was the road tax. He first said it is 4%, then immediately corrected himself saying that he mentioned Pondicherry tax by mistake and that it is 8% of ex-showroom value. I told him that as AFAIK it is 6% of ex-showroom price in TN. But he stood to his stand of 8% tax.

I told him that even if you took the tax at 8%, it should come to only 21,800. So what is the explanation for the extra 10K they were charging?

He mumbled something about registration charges, bribe to RTO guys for getting car registered, transportation charges of car from Gurgaon factory to Chennai etc - which is plainly a truckload of bull.

Later I checked the website of TN-RTO and see that I was right about tax being 6%, which in this case would come to 16354. Add another 1K for registration, regn-plates etc and still it comes to 17354 only which means they are actually charging 15K more than what is due.

I went home and looked up the quote given to me by the Kerala dealer for the same car :

ex-showroom : 2,71,301
Insurance : 7757
Road tax + service charges (Temp/Perm) : 16878
------------
TOTAL : 295936

This is atrocious to say the least and pretty much illegal too, given that you are cheating on taxes. Plus the normal layman would think that a dealer won't inflate taxes and thus ignore that part of the price.

Posted this here so that atleast tbhp-ians would avoid being fleeced by these dealers.
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Old 5th February 2009, 16:27   #2
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The above post is an eye opener, however what would the delear get by quoting high taxes, if unless he wants to bag the same.
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Old 5th February 2009, 16:28   #3
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Good information , No one normally checks and this day light robbery continues.

In Bangalore all the dealers add around 5K as number plate handling charge ( bribe to RTO) and we need to pay 12.25% service tax on the bribe money.

But I never checked if the tax amount itself is correct or not.
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Old 5th February 2009, 16:33   #4
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Mention Dealer's names and Addresses for members to be aware .
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Old 5th February 2009, 16:35   #5
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Quote:
Originally Posted by musicmanaman
The above post is an eye opener, however what would the delear get by quoting high taxes, if unless he wants to bag the same.
Ofcourse he would take the excess amount after depositing only the 6% with RTO.

Quote:
Originally Posted by black12rr
Mention Dealer's names and Addresses for members to be aware .
CARS (I) Pvt Ltd, Cenotaph Road, Chennai.

However, I would not be surprised if other dealers are also doing this.
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Old 5th February 2009, 16:37   #6
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Biju if you dint know these chaps quote higher insurance prices also and then reduce it saying we are giving you a discount.

Once again an eye opener and heck next time I am going to the dealership with a calculator and printouts from the RTO website indicating the actual's.
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Old 5th February 2009, 16:38   #7
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I also always thought that atleast this tax part is quoted correctly since it is printed and distributed to customers as a price list. Really an eye opener.
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Old 5th February 2009, 16:46   #8
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Quote:
Originally Posted by rjstyles69
Biju if you dint know these chaps quote higher insurance prices also and then reduce it saying we are giving you a discount.
You are right about that. Actually I wanted to mention that insurance premium is another area where they can cheat. Thanks for reminding me.

Insurance is again a fixed %-age of the ex-showroom price, if I am right. Don't remember the exact %-age though. Would leave it for the insurance experts on the forum to clarify that part. kb100 should be able to help.
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Old 5th February 2009, 16:46   #9
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This is a long standing practice in almost all dealerships. The money doled out as bribe to RTO is not just for the RTO, it is shared by the dealership's RTO liaison officers too. If you resist, it is these guys who get really hot under the collar.
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Old 5th February 2009, 16:48   #10
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SB:Tax rates in Tamilnadu are 8% now and not 6% as you mentioned.

We have a thread in Tbhp itself discussing the same
http://www.team-bhp.com/forum/indian...amil-nadu.html (Lifetime tax rates to go up in Tamil Nadu)

For Kerala it is still 6% though

Last edited by jraj : 5th February 2009 at 16:50.
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Old 5th February 2009, 16:55   #11
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Quote:
Originally Posted by supremeBaleno View Post
CARS (I) Pvt Ltd, Cenotaph Road, Chennai.

However, I would not be surprised if other dealers are also doing this.
That Dealer is not too good IMO. BTW, you still want a Suzuki. Biju!!


Quote:
Originally Posted by esteem_lover View Post
If you resist, it is these guys who get really hot under the collar.
We can also register the cars and insure it ourselves! For Insurance, one needs the vehicle chassis no and engine number to get the cover note. With the cover note, one can get the vehicle registered via AASI or by themselves.
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Old 5th February 2009, 17:24   #12
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I don't know what the problem is. You will anyways get a legitimate tax paid receipt from the RTO clearly mentioning the amount that has been paid to them. If you find the paid amount less than what you have paid the dealer then you can take the dealer to task.

Also jraj has mentioned that taxes in TN have gone up.
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Old 5th February 2009, 17:31   #13
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Quote:
Originally Posted by jraj
SB:Tax rates in Tamilnadu are 8% now and not 6% as you mentioned.
Well, the TN-RTO website mentioned 6%. Looks like they did not update the site.
And anyway, as I mentioned in the thread, even at 8%, they were still charging 10K more.

Quote:
Originally Posted by headers
BTW, you still want a Suzuki. Biju!!
Why the doubt, Gypsy-man ? 'Always Suzuki'.

Jokes apart, I need a small 4-wheeler that is to be used as a city runabout by my wife within 5-10kms of our home. Highway use would be very limited. I would have gone for the M800-a/c if only it had PS, the lack of which led me to Alto-Lxi. What other options do I have in sub-3lakh range anyway ?

Quote:
Originally Posted by vikram_d
I don't know what the problem is. You will anyways get a legitimate tax paid receipt from the RTO clearly mentioning the amount that has been paid to them. If you find the paid amount less than what you have paid the dealer then you can take the dealer to task.
Why go after the dealer for a reimbursement after coughing up more tax than required, when you can sort this out at the beginning itself and avoid paying excess ?
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Old 5th February 2009, 17:42   #14
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If you buy outside Kerala and bring the vehicle into Kerala (that is, re-register within KL) within 2 years of initial purchase, you have to pay an "Entry Tax" in additional to life time road tax. Those of you who are intending to buy used vehicles outside Kerala should remember this too.

I believe most other states too have this "Entry Tax" system.
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Old 5th February 2009, 17:49   #15
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Quote:
Originally Posted by BaCkSeAtDrIVeR
If you buy outside Kerala and bring the vehicle into Kerala (that is, re-register within KL) within 2 years of initial purchase, you have to pay an "Entry Tax" in additional to life time road tax.
Legally yes, you are right. But what if I don't re-register in KL and continue to drive with TN plates ? That should not be an issue because we have been using TN, Gujarat and Assam registered vehicles in Kerala for years without even a single instance where someone asked us about it.

Anyway, I ruled out buying in TN due to the excess charged here. Plus tax is higher here at 8% compared to 6%. And also need to factor in the time/effort/money involved in driving it down to Kerala. Plus the fact that after 15 years, re-regn would be an issue.
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