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-   -   Pune Nexa showroom allegedly rolls out 40 cars without full payment! More details on page 2 (https://www.team-bhp.com/forum/indian-car-dealerships/192461-pune-nexa-showroom-allegedly-rolls-out-40-cars-without-full-payment-more-details-page-2-a.html)

Beware before you buy that car for 'amazing / massive discount' offered by a dealership. I have recently come across an incident in Pune where the showroom cheated 140 out of 147 customers using this modus operandi. Narrating hereunder how it is done by the showroom:

1. The showroom offers a huge discount on the car on some pretext (group booking, stock clearance, showroom expansion, etc.).

2. The sales representative negotiates a huge discount on the car, formalities are completed, invoice for full amount is issued - however the customer pays only the balance amount after discount (in this case Rs.5 lakh discount was offered on a Rs.13 lakh car).

3. The car is delivered after registration formalities are completed.

4. A few months pass by and then suddenly the customer receives a call from a local police station saying that a complaint has been filed by the showroom against its sales representative for cheating them in connivance with the customer and that the customer is required to remain present at the police station at a very very short notice. (This is where the customers should have contacted their lawyer or some knowledgeable person). Also there is no written communication by the police at this stage and no copy of complaint is shown to the customer). Simultaneously an extract of account is delivered by the showroom to the customer to pay the balance amount (in this case Rs.5 lakh since the account extract shows only Rs.8 lakh has been paid).

5. The customer out of fear, visits the police station - if he is not co-operating, he is made to sit for a very long time, harassed and finally offered a solution to avoid 'arrest' - pay up and settle with the showroom. If he agrees to settle, he is asked to visit the showroom, make payment of the discounted amount and be free. (cops don't say 'arrest' to not so gullible people but make them spend entire day at the chowkey). (140 out of 147 customers settled the matter by paying the showroom full amount :Shockked:).

So at the end of the day, the showroom offered no discount at all (even though others were offering some discount) and the customers ended up paying the full amount. The showroom sold the cars at its original price so they might receive a pat on the back from the manufacturer.

Possible steps to avoid this con:

1. Put on mail / SMS / written form the discount details since showrooms refuse to disclose the discount amount in writing. (Ofcourse, showroom is not going acknowledge that mail / SMS).

2. If you face the same situation, don't react till you have written communication. Police cannot arrest you on such flimsy grounds. Most of these 'offenses' are bailable in any case.

3. Also have a car enthusiast / knowledgeable person involved in car purchase process or atleast read up online before buying.

If anyone has any other suggestions to take preventive steps against such cons, please post.

Note: The name of the showroom, car details are not disclosed since there is nothing in writing. The concerned person has been advised not to entertain anything oral and let the demand / notice / summons / warrant or whatever come in writing. He has also been advised to speak to the helpline of the car manufacturer.

Shocking.

Though without being under police pressure one can sit back and think of several counter arguments. However on the spot it's a scary situation.

Original invoice should have shown discount and net payable amount. Then customer can be in the clear.

This discount seems to be word of mouth thing, as I do not recollect any ad for this in any of newspapers.
5 lakh discount on a 13 lakh car! must be some model which is not selling well and is not popular it seems.

This is hard to understand. It cannot go wrong like this easily, not for 100+ customers. I will tell you why this looks like those WhatsApp forwards or emails that win me millions everyday.

First, the sales rep is not in charge of taking monies from you or issuing discounts. I would not expect a customer with the intention of buying a brand new car not to know the process of a 'purchase'. So, unless the whole dealership is included, including accountants and auditors - this is almost impossible.

Second, the invoice, like someone else mentioned, will show the total amount to be paid and if there is a balance.

Third, most people buy cars on loans. To achieve this, the margin/loan amount have to be tweaked, so the bank must also be involved in the scam.

Fourth, the RTO registers the car and it is delivered to the customer by the dealership only when the full payment happens - I am not sure if even a washing machine gets delivered without being paid in full. Even if there is pending amount, it is to a bank or NBFC which clears shows hypothecation when the registration is done.

I could go on. But in a nut shell, this does not seem to be true to me.

There are a lot of loop holes to this theory: 1) One would always have an invoice break up of how much is to be paid. 2) It's always paid to the account of the dealership or the manufacturer. 3) One takes delivery from showroom not from a galli or by road.

I think this thread is basically baseless and it can't be true.

I wouldn't believe it either if I wasn't personally informed by a few of the 147 customers. Thankfully they haven't fallen for it yet. First few questions I asked were how did they even let you take car out of the showroom if full money was not paid, how do you know a complaint has actually been filed, where is the sales representative - contact him (they couldn't reach him though), etc. So this is an elaborate scam with entire setup included.

Also since huge discount was offered, most of them didn't opt for loan. I am not aware how it worked with bank - someone can elaborate on how discounts work when bank loan is availed of.

As mentioned, its difficult to believe but this is what has happened! As regards the invoice and other documents, lot of deliveries were planned on same day and the showroom staff said "Sir, take the car, papers will be couriered". The invoice shows full value of the car. Payment receipt shows only the actual payment made.

It is a popular car. It seems that every customer was offered more discount if he was buying more than one car. If you are aware, people from Aurangabad have always been in news for group bookings (there are articles about 100+ people booking Mercedes / BMW. Even Team BHP has few articles).

A call from police station unnerves even the strongest!

To sum it up, this scam has happened / is happening whether one believes it or not. Intention of this thread is to know how such scams can be avoided.

Bank being involved is really far fetched. The bank can transfer only the invoiced amount to the dealer. By the way, why is it that the dealer's name or the manufacturer's name is not being mentioned?

Is that some insider information from the dealership that most people did not take the loan? Or an assumption?

The final discounted amount is the invoice amount. The bank states the downpayment, based on the scheme and eligibility - the loan papers are processed, loan is sanctioned for say 8 lakh on a 10 lakh rupee (final discounted price). Customer pays 2 lakh, bank disburses 8 lakh. Full money in the dealer's bank account and then they deliver the car.

Regarding delivery, documents being couriered - don't think a dealership would give out cars without full payment and documentation because someone claims they can mimic a cop very well over phone.

No one in today's world will approve delivery if the part payment receipts do not total up to the full invoice amount. It may cost them their job and get them a leisurely one where they break big rocks into small rocks in the sun, through the day.

Exactly. Also, the final on road price is decided with not just the bank, but with the insurer for IDV and first year premium; road tax and many things are also dependent on the actual amount. Too many loopholes for someone to do this.

@akshay81, so if this is true, why has not a single customer lodged a police complaint against the dealer/ salesman?


What money did the sales guy make in the process ? He just sold the car at discount and vanished?

Why is the name of the showroom withheld in spite of such a big scam involving 140 customers?

The dealer will never send a car for registration without the full money. So not sure how the cars reached the RTO?

More questions than answers.

To me, it does not sound true.

I still don't think that an authorised car dealer will embark upon such suicidal mission to cheat 140 out of 147 customers in this way. The car manufacturer will cancel the dealership if anyone engages into such unprofessional act.

The dealer is unlikey to release the car (or even send it for registration) unless he receives complete payment.

The customer is liable to pay the invoice amount. Discount cannot be verbal. It is very difficult to believe that 140 out of 147 customers failed to notice this.

And if this happens with 140 customers, it would have been viral on social media by now.

With due respect, I sincerely suggest to re-confirm this.

In any invoice, Dealer states clearly about the Total amount, amount paid, Balance to be paid.
If the car owner has the invoice, he can immediately show the invoice to police station and get clean chit.

Also wonder how Police is involved in such fraud 147 transactions? One or two, I agree. Do you think Police is so dumb to accept cases for 147 transactions and arrest 147 customers?

Also, do you think dealer will take such a huge risk of collecting 13 lakhs -5 lakhs = 8 Lakhs *147 customers(Approximately 11.7 Crores) in this cheating path because of avoiding cheap discount of say 20,000 per car?


I fully doubt the truthfulness of this case unless provided by valid data.

I completely agree with Arjun. In today's social media savvy world, such scams are very difficult to hide. Also, when it is a "Popular" (according to Akshay's post) car involved.

Also the insurance company, RTO all need invoices to insure or register the car. Insurance company needs it for calculating IDV. RTO needs it for calculating the tax. How was the invoice not generated? There is something not right here.

Requesting you to recheck and share some evidences.

Bolding mine.

Huh???? There's a missing line then - discount applied. That should show the difference between invoice amount and amount paid. Also there should be something that says payment has been received in full.

Cheers

Sorry mate, but there is no scam here - unless the showroom staff sends goons to get the money.

Once the car is registered, there is no way to claim non payment by the dealership. That is why 99.99% of all dealerships will never even send the car to the RTO without the last paisa received. Once the car is registered, you are the legal owner. I know a case when a dealer held back a registered car over non-payment by a customer and the guy lodged a theft case with the police for not releasing his car.

Invoice is always issued in full amount - case in point, I got my Abarth in 2016 - but it was a 2015 make car. The invoice mentions the 2016 price, but I never paid that much. For the purpose of accounting - e.g. tax etc, a secondary invoice is generated or a debit note is issued.

Further, banks and other loan providers will always issue a letter to dealership asking (I would say ordering) them to not hand over the car without all registration formalities being completed including the Hypothetication on the records. I have first hand experienced the trouble when a dealer releases a car without registration and it is a loan case.

No car invoice will mention discount, because whether you paid Rs 9,90,000, or Rs 9 for a 10,00,000 car, the RTO and government expects tax on the 10-lakh figure.

I wouldn't rule out the loan handling guys being a part of such a scam, but in this case, it seems unlikely.

This can be fixed. Quotation sent to the back can be without discount. That way a bigger loan is approved. And insurance can be done by the dealer. But yes, too many loopholes here.