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Old 20th May 2011, 12:23   #1
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Default Are new cars given for Test Drive from Showrooms insured or not?

My friend's cousin had taken a Test Drive of a Skoda Fabia Elegance TDI on 26th April,2011 from Tafe Access Limited,:53.,St. Marks Road, Bangalore for his colleague as he is planning to purchase the car.

Unfortunately as he was turning the car into the showroom from the main road after the Test Drive at around 2.00 pm, a speeding Pick-up auto crashed into the side of the new Fabia damaging the Right side fender, ORVM and a small part of the Front Bumper. This happened in front of the Showroom with most of the Office staff on looking and with a Showroom person in the Rear Seat of the car.
The Sales Executive who arranged the car for the drive who was also a witness for the incident, asked him to pay 22,000/- Rs (Twenty Two Thousand Rupees) as cover for the damages after his estimation. He informed that new cars in showroom are not covered under Vehicle Insurance and so he has to pay the full amount.

Are the new Cars given for Test Drive from Showrooms insured or not?

When my friend called me to know about this, i was surprised. My thought was they asked him to pay money because it might be a customer car awaiting delivery or he might have been fooled and only proof is the ATM receipt of cash withdrawal

Now he is planning to move to consumer court on this matter

Expecting advices on this matter from all of you
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Old 20th May 2011, 12:28   #2
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

IMO every car should be insured. Of course, the type of insurance could vary depending on whether the car is registered/unregistered/in transit.

There is already a thread on this here. Please post your queries there.

Last edited by rr_zen : 20th May 2011 at 12:30.
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Old 20th May 2011, 12:38   #3
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

Well, first all the cars are insured. Secondly, he is not liable to pay unless he agreed in writing that he would pay in case of any damage. Third, if it is not his mistake then he can go to the police. In any case paying 22k is too much and should be fought well at the least!
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Old 20th May 2011, 12:56   #4
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

Quote:
Originally Posted by anilisanil View Post
Secondly, he is not liable to pay unless he agreed in writing that he would pay in case of any damage.
I feel there must be some protection for the consumer. If your friend has not signed any legal document which says that he will pay for the damages, then the showroom has no case . In case your friend has signed such a document then court has to decide whether such a document is valid or not.
Disclaimer: This is my personal opinion. I am no legal expert.

Last edited by msdivy : 20th May 2011 at 12:57.
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Old 20th May 2011, 13:02   #5
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

When I went to TD the Vento in Delhi, the SA showing me the car also asked me to sing a document with my license details and it said that any damages during the TD will be borne by me. I didnt agree with it but he said its standard policy and without that there is no way I can TD the vehicle. Is this true?

Also In case there is a accident during the TD then who is liable? I doubt if the dealer will bear the expenses.
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Old 20th May 2011, 13:05   #6
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

The dealer\showroom is completely wrong on his part to have a part of his fleet doing a test drive on city roads without insurance.
Per the law, any vehicle driven on the road HAS to be registered & insured by default. Even though it's a test vehicle dealers are required to have a dedicated car for test drives which should be registered.
Your friend can easily lodge a police complaint against the dealer & get his money back.
RTO FAQs please refer to FAQ#22.2.
"No owner of a motor vehicle (in this case the dealer is the owner\responsible for the vehicle), can allow or permit the use of an unregistered vehicle".
Good luck & ask your friend not to let go of his 22k so easily. Overall, I am sure your friend had not signed any document accepting responsibility of any damage to the vehicle during the test drive, which is his second line of defense.
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Old 20th May 2011, 13:12   #7
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

They should be insured, especially with the number of people test driving cars. It is a risk which they should cover for. They do need licence details for legal reasons. They should first cliam insurance and then negotiate on any issues if your friend is at fault.

I could be wrong but it sounds like your friend turned right from a middle lane, considering the auto was in the right lane and hit the front end of car. He should have ensure lane was clear before moving right.


Again, they should not have taken money upfront, make a proper estimate and then take things further
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Old 20th May 2011, 13:27   #8
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

An insurance policy is taken for a vehicle after the vehicle has an owner; in fact, without the reg. no., even a car that is "sold" is not protected by insurance.

Manufacturers have separate insurance for the new vehicles in transit and dealers a separate one for the cars in their possession, although I'm not sure about a vehicle on a TD.

IMO, the dealer was right in seeking compensation; but totally incorrect in the manner in which he asked for it and the amount.

The dealer is at a bigger loss; if the damage and subsequent repair is noticeable, only an informed person would buy that car.
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Old 20th May 2011, 13:46   #9
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

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Originally Posted by libranof1987 View Post
An insurance policy is taken for a vehicle after the vehicle has an owner; in fact, without the reg. no., even a car that is "sold" is not protected by insurance.

Manufacturers have separate insurance for the new vehicles in transit and dealers a separate one for the cars in their possession, although I'm not sure about a vehicle on a TD.

IMO, the dealer was right in seeking compensation; but totally incorrect in the manner in which he asked for it and the amount.
Don't you think you are contradicting yourself in the above 2 statements?
The vehicles for TD are in dealer's name and definitely will have insurance for it.
So why do you say that the dealer was right in asking for compensation. The dealer will definitely claim insurance. It sounds more like trying to make a quick buck.
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Old 20th May 2011, 14:21   #10
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

Even more fundamental. Most dealers use vehicle due to be delivered and not demonstrators for test drives. Unethical, and possibly illegal.
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Old 20th May 2011, 14:31   #11
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

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Originally Posted by libranof1987 View Post
without the reg. no., even a car that is "sold" is not protected by insurance.
Wrong! One can get policy cover note w/o regn number. I refused to take out an uninsured car from the dealer, he made an instant cover note and gave me. I got my regn number after 30 days. So it is possible to get your car insured w/o regn number, it will be insured on your chassis no.

I reversed into a indicab when test driving a Figo, the SA handled it completely. It was my mistake completely!

Last edited by anilisanil : 20th May 2011 at 14:48.
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Old 20th May 2011, 14:47   #12
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

Quote:
Originally Posted by libranof1987 View Post
IMO, the dealer was right in seeking compensation; but totally incorrect in the manner in which he asked for it and the amount.

The dealer is at a bigger loss; if the damage and subsequent repair is noticeable, only an informed person would buy that car.
While taking a test drive of the Spark from Pashankar Auto a tempo from the opposite direction had rammed into the driver side orvm & ripped off the quarter panel. The SA was in the car with me & he too had noticed that the tempo was trying to squeeze into a really tight spot.
However, I offered to pay for the damage & he very kindly said "no sir, it's our responsibility, you have to drive it like you own it". He also mentioned that the car is insured & they will claim for damages. Also, a test car is not intended to be sold as a brand new piece.

Last edited by mb_jg : 20th May 2011 at 14:49.
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Old 20th May 2011, 14:51   #13
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

demo cars are usually registered and insured. at least they are supposed to be.

which is why I hate it when the dealer offers a TD in some car awaiting delivery for some poor un-suspecting consumer. I dont take a TD at all in such situations, preferring to go where there is a demo vehicle available.
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Old 20th May 2011, 15:22   #14
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

Each and every official test-drive car MUST be insured. If it meets with an accident then the showroom should first claim insurance and then maybe ask the customer to pay for the remaining amount, at a subsidized cost maybe.
However, its another thing that many showrooms give customer cars for test drives and these cars are mostly non-registered and non-insured.

Case 1:-When we went to Sai service for a test drive they said we don't need to pay even if we damage the car anyhow.
Case 2:-At Ashtavinayak Auto for chevy beat test drive the SA took down the licence details and said we need to pay for all damages incurred, if any.
Case 3:-At SC ford they didn't say anything about this at all. When asked, the SA said we'll decide only after seeing the damages done.

Some manufacturers like Maruti, Hyundai, Tata, Fiat have official test drive cars which have stickering of the brand's name and "demo car" written all over it.
Did your friend test drive an official demo car or was it an unregistered customer's car?
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Old 20th May 2011, 15:25   #15
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Default Re: Are new cars given for Test Drive from Showrooms insured or not?

Skoda and their dealers. I'm shocked by the sheer number of complaints against these chaps. Phew, when will they ever change?

Crazybiker, please ask your friend's cousin to file a complaint against the dealer. Its illegal to drive a vehicle without valid insurance, and he should have refused to pay in the first place. If he did pay, he should have insisted on a receipt. An ATM withdrawal slip is not evidence of payment to Skoda or its dealer, and the cheating dealer is bound to deny receiving any such payment, if the matter goes to court.

Best of luck, and do post an update once the case is filed.

Last edited by Lalvaz : 20th May 2011 at 15:27.
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