[Sebring]

Of course, MG knows what's happening. Do not think they don't. Actually owning a car dealership is prestigious. So the incumbent dealer agrees to any low margin the manufacturer offers, thinking once the business starts rolling they'll make up somehow. In extraordinary times like the pandemic, this business of 'rolling' had come to a stop and then they realise they're actually bleeding and have to resort to such measures/any measures. In fact, the car dealerships offer such low salaries to staff, that only the desperate take it. Reason why we see incompetence all around. The money is in servicing. Showrooms are a loss. If more people come forward regarding this on social media, MG might actually crack the whip as it affects the brand

Originally Posted by libranof1987

Do name the dealer here and drop in a complaint to MG

[shancz]

Originally Posted by astrodex

Is such experiences common?

Margins apart, IMO these mind numbing sales have gotten into the heads of dealers of Kia/any new manufacturer with unexpected sales, like the case with MG here.

Had a friend who had gone to buy a Seltos and he like me wants to maintain his vehicle his own way so outside of the standard warranty nothing else is taken.
The Kia guys refused to sell him the Seltos if he didn't buy the extended warranty. On top of that they were pretty arrogant and that sale never happened.
So they lost a 15 lakh sale for a 25k extended warranty.
He bought the XUV300 instead which he always wanted, Seltos was the "family pressure"

This attitude is problematic, I had said in some other thread that if this is the attitude with sales imagine the mess in service since sales will always take priority over service and with the issues reported in other threads with Kia's service my fears are coming true.

Keeping multiple cars and dealers in the options and paying in full as the last step after PDI should be the way to go. I have seen many customers who end up taking this nonsense completely forgetting that they're the ones paying and there are other options around too.

To answer your question if he is okay, then so should you be, let them face the consequences of their actions.
Dealer's aren't doing us a favor, its their business.

[Marshall]

Originally Posted by saikarthik

Same story here. I was waiting to post once I get my car delivered, but the thread is already here.
Still waiting for the car to be delivered .

Please name and shame the dealer

[landcruiser123]

What is the exact law? AFAIK, there is no law/policy that prevents one from getting his own insurance as long as he can present it at the time of registration.

Originally Posted by astrodex

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

The best way you can teach them a lesson is not giving them your money and telling 20 of your friends not to do the same.

Don't bother fighting it in court as it can get unnecessarily long for little benefit.

Originally Posted by V.Narayan

Every business be it selling cars or repairing aircraft or manufacturing an engineering product earn through multiple channels that together make up the profit margin.
...To each his own. What may work for one may not for another. Just one man's perspective.

I got to tell you that once we started going to multiplexes for movies in the 2000s, my mom would cook a nice meal before the movie to ensure we don't buy snacks that were 2x-5x the price. But why is outside food-restricted? Because the multiplexes want to make a profit. The reason often given is the "large variety" of food potentially brought in can make cleaning a hassle.

Auto dealers & makers have no legal & ethical reason to force you to buy insurance from them as insurance policies in the open market are highly regulated too.

[Raghu M]

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.

I think this is debatable to quite an extent. The aircraft painting business that was mentioned is complimentary. You want a service, we will do it wholesome. Clients may want to lease out the entire business and not get into procuring all the items that go into painting an aircraft. But the car insurance is not provided by the dealer, it is provided by another company which is quoting a significantly lower quotation for the same service. It is relatively easier (just a call away). I would walk away from such deals as the insurance premiums pile up over the years. The premium needs to be paid every year and the accumulated money is quite a lot when you look at it over 5 to 7 years worth. When I was buying my car, I told the dealer that I will not take insurance from them, I would have walked away from the deal if the dealer insisted that I take insurance from him.

Coming to the restaurants example, I would differ - restaurant does not have a menu for AC and food separately. It offers food with some comfort. But you have the choice of choosing bottled water, no restaurant can force us to cough up additional money for it. It is the customers choice.

[pkk077]

Originally Posted by 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?

I don't think that's the discussion here. The issue itself came up at the very last moment and neither party thought of clarifying it beforehand. The learning from this experience is that one should work out every single payment detail right upfront at the time of negotiation before paying a single rupee lest we be surprised at the last minute. Of course this might mean not getting any other offers from the dealers once they realize they are not going to make any additional money off you but for popular models where there is no discount anyways, there is nothing to lose by being clear upfront.

[kiku007]

Might as well add automobiles under the sin-goods list in India.

Almost half of the purchase price is tax.
Lifetime road-tax for a typical ownership of five years. Then pay toll on roads as well.
Almost 100% tax on fuel.

A myriad of reasons are given to justify all of the above.

Now I see reasons on why people should pay the dealer X% more for insurance. Seriously?

[V.Narayan]

Shoddy and rude behaviour by a seller is never pardonable and I don't support a car dealer metaphorically spitting on a customer and to that extent my sympathy is with member @astrodex. But as the purpose of a discussion is to examine alternate views and not become an echo chamber indulge this retired old codger while I toss in some provocative thoughts.

Originally Posted by astrodex

I had a very strange experience car buying experience that had me question how much money does a dealer make when they sell insurance?

How much was the saving on insurance between the dealers quote and the bankers quote, apples to apples. At the risk of being throttled on Team BHP I will say I notice some members spend say Rs 25L on a car and then go nuts trying to get an insurance that is Rs 6,000 cheaper. I can imagine some one buying an Alto who has limited means needing to bargain to get the cheapest insurance given that his means are probably limited. You say this car was being bought on company account. I am a bit confused whether you are taking the loan or your company is taking it{employer? your own company?} So I am just curious over how many rupees of insurance differential did you lose the car you had set your heart on? The dealer was silly enough to lose the sale. But you lost the car too on decisions you chose.

I had approached my bank for loan and they offered me an attractive rate, provided I take the bank's insurance. Since it was coming to be cheaper than what the dealership offered, I agreed and didn't think much about it. I still can't believe they would cancel something a 44 lakh car sale for Rs 5000/-

So bundling can happen and does happen. Are there other facts to this case than what you have narrated? Any other discussion, incident, heated exchange or something that had already soured the interaction to the limit?

Originally Posted by gkveda

Dealers cannot mandate customers to purchase from them.

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.

It works both ways. The dealer has as much right to refuse to sell as we have the right to choose whom we buy from.

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.

The root cause of dealers pushing these add-ons is the very low margin he earns on the base product ie sale of a car. Why because we the customer want the car at the cheapest possible price. There are industries where the OEM says if you buy only my base super low margin product then the price is Rs 100. But if you buy the product and the other services needed with it the price is Rs 95. The aircraft engine industry prices that way. Only the MG Gloster then pay Rs 46.50 lakhs. Willing to buy insurance, accessories and one year of servicing from me then price of car and packaged services Rs 44.75 lakhs - just an illustration.

Originally Posted by 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?

Thank you +1

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?

A buyer who doesn't shop around endlessly is not necessarily a sucker. He could be someone who values his time and convenience more.

[motonomad]

Originally Posted by astrodex

I had a very strange experience car buying experience that had me question how much money does a dealer make when they sell insurance?

Wow. I used to think things were better for car buyers but some of the recent threads make me rethink.

A friend and I were buying Hero Xpulse last march and I initially decided on buying insurance elsewhere. While the dealer tried to convince me otherwise, he gladly sent me the chassis numbers of both the motorcycles we were buying shortly afterwards and just asked us to make sure the insurance is bought a day before we take delivery and ride out on the road.


Of course he was still trying to convince me to buy from them by messaging me 'advantages' that the policy they are offering has and offered to add/remove add ons but at no point did he make a big deal about not buying insurance from them.


Maybe with their volumes they didn't care or maybe they just wanted the last two BS4 Xpulse gone but nevertheless, insurance was not an issue. We ended up buying from them only but simply because the guy was nice and the price difference was marginal.

[NiInJa]

This insurance purchase has always been one point which can sour the relations with a dealership and I am a bit wary about this whenever I go for a vehicle purchase. I was a bit surprised when Maruti Insurance Broking quoted a figure which was just about 1000 Rupees more than what I was getting outside, plus, I insisted them to not include unnecessary add-ons for which they obliged with less protest as long as I was buying it from them. So went ahead and brought it and even renewed it from them. At the end, I am getting a co-operative dealer who is ready to deal with my nagging and nit-picking on smaller things when it comes to servicing my car. Can't say if its right or wrong but that is how it is in India

To summarize, it works well when dealer quote is within reasonable limits, but problems start when they start charging way more than what the market is offering. In OP's case, its going to be tricky as I don't think there are other dealers of MG around.

[clementw]

The commissions in motor insurance are crazy. There is a pressure on numbers as this revenue can be sizeable though often it is not exactly how do i say it legal. There is a lot of grey areas in this business and the loop holes are actually market practices today. It comes down to how accepting the dealer is and how strong there is a demand for their vehicles.

[shamshers]

I'm normally a silent observer on this forum, but this instance hit very close to home on my recent experience on the purchase of a MG Gloster.
I was replacing my fathers 4 year old Endeavour, and we spoke to the Sales person at a MG dealership in Delhi, and paid the 1 Lac booking amount. A few weeks later, the sales person informed us the car was ready and we can start the paperwork. He offered his banks services, which my father told him, we have a 30 plus relationship with BOI, so we might give it to them. Bank of India offered us a relatively decent rate (MG was better though), but we decided to go with BOI. They asked for a proforma, so dad asked the sales person. He provided the proforma with insurance. Dad told him he didnt want insurance since we have our own agent who does our business insurance, to which he replied, "This is company policy, you have to take insurance from us". Dad was a little disappointed that he was being put into a corner, so he called me. Not willing to talk on the phone, I left office, and went with Dad to the dealership. I told my salesperson I will be there to collect the invoice, so he asked an aide of his to help us.
When we arrived, we were made to sit down and the proforma was presented. I told the lady (aide to our sales person) I didnt want insurance, and she immediately made the mistake of saying "Sir this is company policy, if you dont take our company insurance we cant sell the car".

WOW!
Calmly, I pulled out my phone, put it on record and asked her to repeat what she said, dumbly enough she did.

I then told her:
1. Miss are you an IRDA appointed agent?
2. DO you realise as a customer I have the right to purchase insurance any where and by refusing to sell me the car, you have just broken half a dozen IRDA laws.
3. The booking payment receipt does not mention this condition.
4. Thank you for stating this on record, I am still recording, and I have informed you that you are an idiot that you would threaten my father to cancel the sale of a 40 lac plus car for insurance.
5. Now, please call your GM of the dealership, and lets replay this conversation, and please bring your IRDA accredition.

The whole mood changed. GM didnt come up, but his assistant did, said it was a huge error on this new aides part to say something like this and I can get my financing and insurance from anywhere, and because of this inconvenience they would like to make it.

I did get the car, and rated them low on MG scores (which they were unhappy about, but it serves them right since they thought they could bully my 70 plus dad into an agreement he was not comfortable with).

Bottom line, they can offer services, but they cannot dictate to a customer on what insurance to choose.

I remain disappointed with this dealer, but I'm glad I managed to get my vehicle on my terms, which to me is surprisingly sad that even today, we have to fight for basic rights.

[Marshall]

Gurudev Skoda Chennai too insisted that I take insurance from them. It was either lose the hefty discounts or the insurance, I settled for the lesser of the two evils. 2nd Year onwards I got it on my own.

[fazayal]

After seeing many posts on this topic, what I feel is ethical should be to clear with the dealer at the time of booking if you want to do insurance, finance, accessories and registration (yeah, that is also possible) on your own.

Many times the dealer gives discounts from insurance margin. Customer does the booking and then later says that they would get insurance from outside would upset the calculation for the dealer. (I doubt if MG is giving any discounts though)

I read on this thread, that cash being asked from customer. This can also be a scam where dealership employees would pocket the cash. I have personally seen this happening. Never give cash to any individual. If you do, get a proper receipt.

[alphahere]

It is understandable if they say they can provide a cross sale discount if the customer takes multiple products from them. But this should be accounted for in the showroom price component which would eventually be a part of their profit margin. They cannot just randomly state that one has to pay 5000 extra for RTO which is something that is already a fixed amount.

The only explanation that I can see is that they were already quoting the vehicle at MRP with zero discount AND they wanted to bump up their profit all the more from the insurance sales and any other available avenues as well. When that didn't happen they just tried to recover their lost insurance sales commission in the name of extra RTO charges. And they were fine if the sale was lost because they are confident that the next person will come along sooner than later who agrees to all their terms.

This was not a good attitude. Dealerships are present in order to sell to the consumers what the consumers need. Not to thrust upon the consumers what they want to sell. If they can't give a discount that's fine but they should have no right to insist that they will sell a product only if a cross sale happens. From the insurance industry point of view this looks to be in fact a kind of reverse 'rebating' process which the IRDA slams down on as it goes against the acceptable market conduct. Rebating is actually the practice by which extreme discounts up to a whole year's premium are offered by an agent/broker to the customer via unofficial channels to capture the business because the customer is about to walk away to a different company. It just means that no one can force anyone to buy insurance from someone if they don't want to.

Looks like it is high time that the motor dealerships are brought in from their wild run by a third party like a market conduct authority or an ombudsman who work from the side of the consumer. Maybe this issue can be raised with an independent body like SIAM but not sure if they would accept such cases.