[N.A.GTC]

Originally Posted by Samurai

Bundling products/service together is trick used by marketing teams in every business. For example, when my wife was shopping for a hatch back, she wanted ABS and airbag, but not sunroof. But i10 Asta had bundled all the 3 features, for a huge extra cost. If you wanted one feature, you had buy all 3 features. So we bought the sportz trim, and gave up all 3 features. Hyundai was practically forcing sunroof on every safety conscious buyer. But we decided to reject it. BTW, our i10 completes 10 years today.

That's not the same thing, though. You still buy ONE product, which has it's own set of features.

Bundling/tying of products is the issue. Not of features.

And yes, business do it to maximise their profits -- businesses do anything for that reason alone. That doesn't make it right. Neither legally (as I elaborated in previous post), nor ethically. Profit may be the motive of a business, it is not the motive of a just and fair society.

Congratulations on your i10's birthday, though!

[bblost]

As per https://www.irdai.gov.in/ADMINCMS/cm...eNo3243&flag=1

The dealer who is defined as:
(c)“Automobile Dealer” means a person who is an authorised dealer or a sub-dealer of an automobile manufacturer for selling new or used automotive vehicles.


Maybe in Violation of:

Section 11 :
(a) receive any payment directly or indirectly for outsourcing activity behalf of either the insurer or the insurance intermediary;
(b) force the prospect/ policyholder to necessarily buy motor insurance policy through a particular insurance intermediary or insurer;
(c) deny the prospect his rights and options to seek motor insurance policy or renewal of motor insurance policy from any insurer or insurance intermediary;
(d) directly or indirectly control or interfere in determination of premium of policies;
(e) direct or indirect imposition of risk selection by insurers or curtailment of choice of the prospect/ policyholder;
(f) interfere in product design;
(g) interfere in the appointment of surveyors and loss assessors assessment activities;
(h) directly or indirectly influence the claims for inflating its revenue;
(i) solicit motor insurance business from those persons who did not buy the automobile from it;
(j) issue a motor insurance policy or a motor insurance cover note that carries name or logo or any other symbol, except that of the insurer;
(k) conduct its business in a manner prejudicial to the interests of the policyholders;
(l) indulge in manipulating the insurance business;
(m)indulge in unfair trade practices;
(n) default in complying with, or acts in contravention of, any requirement of the Act, IRDA Act, 1999 or of any rule or any regulation or order made or any direction issued thereunder;
(o) default in complying with any direction issued or order made, by the Authority;


I am not a lawyer and this in my layman's view that this is a case worthy of bringing to the notice of the IRDA.

[Samurai]

Originally Posted by N.A.GTC

That's not the same thing, though. You still buy ONE product, which has it's own set of features.

Bundling/tying of products is the issue. Not of features.

That's just semantics. Ultimately, it is bundling of multiple unrelated items. My wife and I really dislike sunroof and didn't want to pay for it, even at the cost of losing other things we wanted.

Originally Posted by N.A.GTC

That doesn't make it right. Neither legally (as I elaborated in previous post), nor ethically.

Doesn't make it wrong either, unless it is illegal. Businesses are constantly pressured by shareholders to maximize profits, and any management that ignores that will be out of job. Applying ethics via laws into the equation according to prevailing zeitgeist is the job of the government.

Personally I think it is unethical to remove 4WD from any SUV, I equate it to gelding. But it doesn't bother most SUV buyers these days. And from the business perspective, 2WD SUVs are highly profitable no matter how vile I think it is. But, is it really unethical for companies to sell 2WD SUVs, I guess not.

Originally Posted by N.A.GTC

Congratulations on your i10's birthday, though!

Thanks.

[playingpossum]

Originally Posted by Samurai

Doesn't make it wrong either, unless it is illegal. Businesses are constantly pressured by shareholders to maximize profits, and any management that ignores that will be out of job. Applying ethics via laws into the equation according to prevailing zeitgeist is the job of the government.

Personally I think it is unethical to remove 4WD from any SUV, I equate it to gelding. But it doesn't bother most SUV buyers these days. And from the business perspective, 2WD SUVs are highly profitable no matter how vile I think it is. But, is it really unethical for companies to sell 2WD SUVs, I guess not.

Thanks.

bblost has shared the relevant section from the rule book which implies that the dealership is in violation of the IRDAI rules (layman's reading)

Furthermore as I mentioned in a previous post, I wouldn't have much of an issue if the car market was a free market. For a specific brand, you are often stuck with just one option and abusing the market position is unethical and wrong. It is not just detrimental to the customer but to the manufacturer as well.

Lets take a hypothetical,

If you were granting me an artificial monopoly to sell your product in a certain area. And I were to force customers seeking to buy your product into buying an overpriced complementary product/service.

Would you not object to me losing potential sales and potentially damaging your brand image due to me seeking short term profits (though unethical and rule-breaking behaviour)?

Originally Posted by bblost

As per https://www.irdai.gov.in/ADMINCMS/cm...eNo3243&flag=1

The dealer who is defined as:
(c)“Automobile Dealer” means a person who is an authorised dealer or a sub-dealer of an automobile manufacturer for selling new or used automotive vehicles.


Maybe in Violation of:

Section 11 :
(a) receive any payment directly or indirectly for outsourcing activity behalf of either the insurer or the insurance intermediary;
(b) force the prospect/ policyholder to necessarily buy motor insurance policy through a particular insurance intermediary or insurer;
(c) deny the prospect his rights and options to seek motor insurance policy or renewal of motor insurance policy from any insurer or insurance intermediary;

...

(m)indulge in unfair trade practices;
(n) default in complying with, or acts in contravention of, any requirement of the Act, IRDA Act, 1999 or of any rule or any regulation or order made or any direction issued thereunder;
(o) default in complying with any direction issued or order made, by the Authority;

[pkk077]

Originally Posted by V.Narayan

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.

Not a correct comparison. If the same 25L car can be had for 24L, most would opt for it. If the exact same insurance can be had for 6K cheaper then why not?

[Tgo]

While we are discussing forcing a buyer to buy insurance from the dealer being WRONG, there was one instance when I was forced to buy from the dealer a few years after the car was purchased. What we dismiss as small talk, "Sir we will give you good service, faster processing etc.." turned out to be true in this one instance.

Originally Posted by Tgo

IDV: 10,50,000/-

Spoiler: Turns out that the above mentioned quote was not to materialize. I learned a new word by the way, its called MORATORIUM

The person dealing with the insurance company called up late evening day before and said that the request for insuring the vehicle was rejected by TataAIG. Yesterday, on probing he was told by the company that the vehicle is under Moratorium - which in their words mean that Rajasthan govt. had put a ban on this model of vehicle.

I frantically called him up to confirm, checked on the internet, confirmed with the dealer in Jaipur and everything was opposite to what the insurance company told him/me. So I got back on the phone with him and relayed the information i gathered. He said, that companies are not willing and even if they are they are quoting close to 45K for the same coverage because they aren't offering any discounts on this model. Other than that the newest company on the block Liberty Videocon will match the coverage and TataAIG's rates. Explains why I was initially getting a quote for 51K from BhartiAXA which also provided last year's coverage for the vehicle. And also why only two companies returned a query for quotes on policy bazaar.

I decided to go with Renault Assure. Simply because there was no other reliable resource to bank upon. It cost me 37K for Zero Dep, Engine Protection and consumables cover.

I now suggest people not to argue too much on the insurance quote of a new car from a dealer because,

• one can always get a suitable deal from the next year on.
  
• At the price point accessible to me or people who seek my advice, the insurance premiums are not insane whether bought from a dealer or separately.
  
• I do ask them to match the quote one can get from outside and they usually reduce some amount from theirs.

I would much rather have the car I finalized after months of prospecting in the garage, than settling for the next best option.

[N.A.GTC]

Originally Posted by Samurai

That's just semantics. Ultimately, it is bundling of multiple unrelated items. My wife and I really dislike sunroof and didn't want to pay for it, even at the cost of losing other things we wanted.

No, not just semantics! Features of a product ≠ the product itself. And that's a big difference.
Moreover, sunroof, ABS, etc. are al ultimately related to your "main" product. Insurance is not, it's an altogether different product.

Doesn't make it wrong either, unless it is illegal.

Personally I think it is unethical to remove 4WD from any SUV, I equate it to gelding. (...)But, is it really unethical for companies to sell 2WD SUVs, I guess not.

Well, it IS illegal. And it is unethical not because one feels it, but because it has the potential to cause actual harm to the public/society. Both of the points I addressed in my original post in this thread:

Originally Posted by N.A.GTC

Let's take an example. ...

Coming to the question of "rights", such bundling could possibly be violative of ...

Cheers

[Samurai]

Originally Posted by playingpossum

bblost has shared the relevant section from the rule book which implies that the dealership is in violation of the IRDAI rules (layman's reading)

Then it is settled, the OP can file complaint with IRDA against the dealer. We don't have to discuss ethics, when the law is clearly violated.

Originally Posted by playingpossum

I wouldn't have much of an issue if the car market was a free market.

Free market is a myth. There are always market forces and even laws that favour one party over the other.

Originally Posted by playingpossum

Would you not object to me losing potential sales and potentially damaging your brand image due to me seeking short term profits (though unethical and rule-breaking behaviour)?

It depends on the strategy of the company. Most top managements only pay lip service to ethics and morals. Why certain companies have very bad after sales service? Because better service comes at higher cost than they are willing to spend. Finally it all comes down to budget, cost, profits, etc. Every company picks where they want to be.

Originally Posted by N.A.GTC

No, not just semantics! Features of a product ≠ the product itself. And that's a big difference.
Moreover, sunroof, ABS, etc. are al ultimately related to your "main" product. Insurance is not, it's an altogether different product.

It makes no difference to a buyer. Paying 50K more for insurance vs paying 50K more for a feature I don't want, they are equally irritating to me.

[Herschey]

I think building a feature list to form a product is different from bundling two products together and laying coercive conditions upon their sale.

Forget the IRDAI, such manipulative trade practices are prohibited and punishable under law. Section 2 of the Consumer Protection Act, 2019 clearly defines this as a Restrictive Trade Practice which is prohibited and punishable by law.

[pkk077]

Originally Posted by astrodex

The moment I told them that I was doing insurance and financing from HDFC (which I had told the sales guy before, but apparently the sales manager did not know) there was a perceptible change in their demeanor and they kept requesting me to take their insurance.

Just wondering if you could have taken only the third party insurance from them and taken the first party one from HDFC. Is it allowed to have first and third party insurance from two different providers?

[Gansan]

As per IRDA rules an agent should not force a policy or sell a wrong policy to the client, but I don't think that applies here. It doesn't matter if the showroom staff talking to us doesn't have IRDA certificate. The showroom will definitely have certified people if it has an insurance desk. If the staff merely tell us it is management policy, it can't be held against them.

A new vehicle must have an insurance policy. To that extent insurance is not forced on the buyer by the dealer. It must be taken from somewhere. He can very well say if you don't take from my firm I won't sell the car. There is nothing we can do about it. Even if a product is marked as xxx rupees in the display window and when we go inside to buy it but the dealer refuses to sell, there is nothing we can do. Because he is not making an offer to sell. The display price is an invitation to offer, we are offering to buy it, and he can either accept or reject the offer. That is law of contract.

I always take the first policy from the dealer when I buy a car or bike. Later while renewing I go wherever I please. I have noticed whenever taking insurance outside is mentioned, some of the freebies on offer will disappear.

For some brands/models it is a seller's market. We can't do much while buying them, For some other brands it will be a buyer's market, and they will bend over backwards to accommodate us. Applies to any product.

When I approached a popular bank which opened a branch right in front of my home for a safety locker they wanted me to buy an insurance product from them for one lakh annual premium. Despite the fact I was a long time customer of the bank. I declined and went to another bank.

[quattroa4]

This is called work culture or ethics of any company which filters down to lowest levels also .In this case it is the dealer , but what can you expect from a Chinese brand ? The result is in front of you then .

[drmohitg]

Originally Posted by V.Narayan

Personally I always take the insurance through the dealer. Let the blighter earn his bit. In return insurance claims have always been a breeze. To each his own. What may work for one may not for another. Just one man's perspective.

Have you faced difficulties in filing a claim in the rare instance where you didn't have insurance from the dealer? I have had to take 4 claims on my cars in the last decade and each time it has been a breeze. The policy was always bought from outside and to be honest, barring one, all the remaining ones were from Policybazar simply as they offered the best rates. Infact from what I have seen, there is little connection or communication between the sales team who sell you these promises and the claim teams who interact with you at the time of a service/repair. It boils down more to their personal relationships with the concerned insurance provider agents.

Originally Posted by V.Narayan

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.

Again my apologies sir but this I can never come to terms with. You may choose to pay x amount of money citing various reasons, most common being that it is hassle-free. But you cannot claim that if someone is paying 25L then he shouldn't bother paying few extra thousands. I am paying 25L because I see value in the product. But the few extra thousands or even a penny for that matter is something that I am being forced to pay and which I know is unethical. Whether it is an Alto or a Range Rover, I would want to pay only what I am supposed to.

Originally Posted by Samurai

I fall into the second category. Unless mandated by law or by reseller agreement, any business can refuse to sell an item/service to the customer. I often refuse a sale, if the demand results in loss or opportunity cost. One may sell at a loss for strategic reasons, but customer can't insist that the vendor must sell at a loss.

I too run a business where I play the role of a dealer. But beyond a few basic practices, you cannot compare different businesses. A car dealer is not a regular businessman. He has a monopoly of sorts where the customer doesn't have the option of buying the same product from a 100 different sources. That is the reason they escape the penalties even while over-charging for most services which the customer cannot opt out of. Yes, they don't need to entertain a rude customer or offer discounts on the ex-showroom price of the car. But at the same time they cannot club other things and label them as mandatory and then choose customers on the basis of that. There is a thin but definite line between when you are ethical and when you start cheating people. As a business family myself, the motto is to maximize profit but not by resorting to arm twisting. It is actually by providing the best VFM option in terms of either the service or the cost of the product such that the customer wants to sign the deal with you.

[bblost]

Maruti was fined for discriminating against those who bought Insurance from outside.

https://www.moneycontrol.com/news/bu...s-4772681.html

The Insurance Regulatory and Development Authority of India (IRDAI) has imposed a penalty of Rs 3 crore on Maruti lnsurance Brokers Pvt Limited (MIBL), the largest insurance broker in the country, for violation of various regulatory norms. The IRDAI has found the MIBL in violation of the Motor Insurance Service Provider (MISP) guidelines on various counts, including the one related to empanelment of general insurers.

and also https://www.financialexpress.com/mon...geous/1810230/

[Samurai]

Originally Posted by drmohitg

There is a thin but definite line between when you are ethical and when you start cheating people. As a business family myself, the motto is to maximize profit but not by resorting to arm twisting. It is actually by providing the best VFM option in terms of either the service or the cost of the product such that the customer wants to sign the deal with you.

Please don't compare the ethics of a small company where promoters impose their ethics, to a large listed company (car maker) where shareholders are breathing down on the management every quarter to improve the profits and raise the share price. They are not allowed to be nice, unless it is mandated by law. Milton Friedman screwed it all up before most of us were born.