[gkveda]

Originally Posted by V.Narayan

Pray why would it be unethical in my business (which you quoted). I am not forcing the customer to buy my services and I am offering it only as a bundle for those willing to buy. If they want to dis-aggregate they can go to Happy-Joe next door and get it cheap and cheerful. But don't expect OEM standard quality and Happy- Joe's super low price all together. Why should I offer only one part of my service? I'm running a business not a charity. Let's say it is a hot summers day and you are out on the street. And there is an air conditioned restaurant across the road. You want to cool yourself - can you as a customer say I will sit in your restaurant and enjoy the air conditioning and order a glass of water knowing both are free but not order any food? Not sure where hospitals have turned up in this discussion.

Right example here in this case would be, if you go to a hotel and order plain dosa(without aloo sabji), hotel owner is insisting you take only masala dosa(with aloo sabji inside dosa) and charging more.

It is customer decision whether to order plain dosa or masala dosa. Hotel owner cannot insist customer to purchase only masala dosa.

Keeping Examples aside, dealers cannot mandate customers to purchase insurance with them because,

1. Insurance companies have not appointed dealers, to be agents for their products.

2. Manufacturing companies have not instructed dealers to sell policy along with their products.

3. There is no law from state or central government that says insurance policy has to be sold along with cars by the dealer.

Given, all the 3 parties involved have not mandated dealers to sell policy along with cars, Dealers cannot mandate customers to purchase from them. However, they can sell it as optional accessories.

If customers find value in terms of cost advantage OR quality of products or services, they will go with dealer. Else if they get the same or better value in outside market, they will go with the outside market.

Let's take an example of accessory, say mats.

Car dealers sell car mats at very high price compared to local market. Few prefer to go with dealer and few would go with local market.

Now, can dealer reject a car sale if customers prefer to purchase local car mats?

I think, car manufacturers should work on this seriously if they want to give value to customers and control this insurance mafia at dealership rather than individual car owners fights with dealer.

[playingpossum]

Originally Posted by gkveda

Right example here in this case would be, if you go to a hotel and order plain dosa(without aloo sabji), hotel owner is insisting you take only masala dosa(with aloo sabji inside dosa) and charging more.

Similarly - I would put the Value Add Services that mobile companies used to have in the old days. That was pure profit for them - and I've seen them try and push the VAS to people using some unethical means - sometimes activating the service on their own.

I'm buying a mobile plan from the provider - data/sms/calls. Provider forcing customer to buy their useless VAS just because its pure profit is a scummy move because they are essentially holding huge market power (due to limited number of options in the market)

The dealerships are essentially regional monopolies granted by the vehicle manufacturer. There are a limited number in an area and usually they are spread apart. Which gives them certain amount of power. (There are 2 in Pune area run by same company - which means that if I what to buy an MG, I'm essentially stuck with them)

Abusing said power granted by the regional monopoly power - by forcing customer to buy their overpriced insurance is detrimental to the manufacturer and to the customer. It is a purely self serving move for short term profits for the dealer alone. If I were a customer - I would be driven away from buying an MG in the future. Similar to how some family friends were driven away from Hyundai due to scummy behaviour at dealership.

[Nithesh_M]

Happened to me with Advaith Hyundai. They tried to play it down on delivery day despite charging me 200% for the same coverage than market price. They wanted better ratings than 9 out of 10. I promised to give them that with a wry smile. Then when Hyundai called to get feedback, I ripped the dealer a new hole. They were panicking and asked me to change my ratings via mail. I wrote a scathing mail detailing the shady practice of threatening to change allotment if I didn't purchase insurance in-house in that response. Haven't heard from them since.

Only reason I paid up the loot was because Hyundai had a price hike ready to charge more than the insurance loot itself. So I've made peace with it.

[Bibendum90949]

Originally Posted by astrodex

Long story short, they finally asked for another Rs 5000/- additional in cash for RTO and when I refused, they said their management could not approve the sale.

They didn't ask. They asked you to turn back and show your hip pocket so that they can pick pocket, and without any shame or ethics. Good that you walked away. If this is what you experienced even before buying the car, you could well imagine the service experience that was in store for you with this dealer. There are better options out there than Gloster.

[Simhi]

Originally Posted by astrodex

I still can't believe they would cancel something a 44 lakh car sale for Rs 5000/-

From your post it is not clear whether you bought MG Gloster from another dealer or not. I am sure you spent a lot of time in short-listing the vehicle. The time we spend with the dealer sales and service is very less compared to our vehicle ownership period. It is always then better to work out things which is beneficial to all parties.

I take all my insurance policies from my agent. When I approached him for the new car insurance, he himself suggested to go with the dealer but provided me a reference quote and asked me to request dealer to match it. Dealer was more than happy to match the quote. From second year onward, I was back to my agent. There was no pestering from dealer to renew with them. Not sure if this would have worked in your case as the deal with the bank was to take insurance from them.

[GBX]

Originally Posted by astrodex

I had approached my bank for loan and they offered me an attractive rate, provided I take the bank's insurance.

Why is it this isn't being discussed?

The bank puts a caveat on the low rate loans, and that's fine. But the dealer wanting to do the same is somehow strange?

Originally Posted by V.Narayan

Personally I always take the insurance through the dealer. Let the blighter earn his bit.

Amen, agreed on this attitude.

Originally Posted by gkveda

Dealers cannot mandate customers to purchase from them.

That's not what the dealer is doing. He is simply exercising his right to refusal.

You probably have/will do the same when you have to sell your car and refuse to entertain offers below a certain price. Is that a mandate? No, its simply negotiation.

Originally Posted by gkveda

Now, can dealer reject a car sale if customers prefer to purchase local car mats?

Yes they can actually. Its a free country.

[airbus]

This is atrocious. It should be customers decision from where he/she wants to avail the insurance. It's strange that dealer is ready to forgo a customer just because they are not getting insurance commission. Seems like they are overconfident on getting customers. Under such circumstances, I would definitely go to another dealer or brand.

When I bought my current car under car lease from my employer five years back, my employer took the insurance from our preferred partner as we get discount for bulk orders. Mahindra dealer did not have a problem with that.

[PrideRed]

Dealer usually reduces premium to match the premium you are quoted outside but ends up being at least 10-20K higher in case of Gloster, which to me is ok. Dealers usually have hefty margin on insurance, bank loans and accessories. In case of Gloster, they will easily make a lac with these 3. While the margin offered by manufacturer, service bills help dealers break even, it's these stuff that help in becoming profitable.

At the end of the day dealer has to make money and will want to sell the car at fatter margin. Before buying the car either you should make deal with trustworthy or have the dealer agree on writing for all the stuff you plan to pay.

[asit.kulkarni93]

This is atrocious. I would say it’s a blessing in disguise. Please look at a different car. MG is clearly not worth your hard earned money. I wouldn’t be surprised if this news spreads and MG starts a campaign showcasing how awesome and ethical their dealerships are through their puppets from the media and influencers.

People justifying the dealer’s approach by saying how can they make money is clearly wrong IMHO. The SA should have spoken to his senior in advance and given you a better rate. Bringing this up at the last moment makes 0 sense. This is a clear case of bullying. If I want to buy a pencil from a shop then the shopkeeper can not force me to buy an eraser & sharpener from him especially when someone else is giving me the same sharpener and eraser for a better price.

[GTsunny]

Originally Posted by astrodex

I had a strange car buying experience

A car purchase is something we look forward to, and here you have harassed a customer and spoilt his purchase experience.

I’ve tagged MG India and marked a link to this thread and, requested them to help out.

Also, if you are comfortable, kindly share on this forum the name of the dealer thanks

[k10_nag]

I usually found the insurance rates by dealerships to be slightly higher than market rates but never unreasonably so. The usual culprits are the add-on bells and whistles that cost a lot. The dealer pushes for premium after including the add-on. With slight negotiation, dealerships normally agree to drop the add-ons insurance features and helps bring down the cost of premium.


OP may try to check the break-up of premium and negotiate to bring-down the premium. There is no point in dropping chosen car due to dealership experience on such a trivial issue. But if your city doesn't have alternate MG dealerships , better to inquire if this dealership offers at least better service experience before committing the money.

[greenhorn]

People here are saying customer has the right to choose insurance. While that is true, is it not equally true that the dealer has the right to serve or not serve a customer?

From the perspective of a dealer. When a product is in demand and in short supply, the focus goes from volumes (as they are constrained) to margins. The dealer has a choice of selling to a well informed customer who will exercise his rights to the maximum extent to get a deal, or a sucker who will sign on the dotted line wherever the dealer tells him to. Guess which one the dealer is going to prefer instead?

Competition goes both ways. Just like there are other manufacturers competing to sell a product, sometimes there can be customers competing to buy the same product. Guess who is king then. That's what's happening

[bharatbits]

Single escalation email will set all the intermediaries straight. The dealer is just a facilitator between the manufacturer and the customer. Your relationship is with MG and not with any Harry or Michael who may or may not be there tomorrow. The particular dealership may shut service or sales or altogether move to a different manufacturer if presented with a more lucrative proposal.

[Mortis]

One more thing to keep in mind about inflated dealer insurance quotes is that if you accept it, you will end up paying a higher amount for insurance again every year when you renew it !! I don't think this point has been discussed in any of the similar threads.
For example, keeping all parameters similar, if the Dealers insurance quote is Rs 1 lakh and outside insurance is at 60k, then every year you renew it, the new premium figure will revolve around the cost of your original insurance ! Say it decreases by 10% the next year, you will pay 90k to renew the dealers insurance and 55k to renew your own. I doubt that dealer insurance renewal quotes will drop steeply to market rates at the time of renewal

[Dry Ice]

Originally Posted by Mortis

One more thing to keep in mind about inflated dealer insurance quotes is that if you accept it, you will end up paying a higher amount for insurance again every year when you renew it !! I don't think this point has been discussed in any of the similar threads.
For example, keeping all parameters similar, if the Dealers insurance quote is Rs 1 lakh and outside insurance is at 60k, then every year you renew it, the new premium figure will revolve around the cost of your original insurance ! Say it decreases by 10% the next year, you will pay 90k to renew the dealers insurance and 55k to renew your own. I doubt that dealer insurance renewal quotes will drop steeply to market rates at the time of renewal

But what stops you to buy insurance from elsewhere 2nd year onwards?