[fawad0222]

I think whatever dealerships provide in addition to their core business of selling cars, they earn a handsome profit, be it insurance or loan or accessories. Recently a leading public sector bank manager told me that bank has to give a good profit margin in the car loans to the dealers if the request for the loan comes through them. The customer can get better deal if they directly deal with the bank. so its always better to directly deal with the service providers instead of going through an intermediary.

[Turbanator]

Originally Posted by Samurai

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.

Do you think the extra monies that dealership gets from customers by charging higher rates goes to the manufacturer?

To me, it’s nothing but demand and supplies and manufacturers free hand that results in such behaviour by the dealerships.

Regarding paying somebody extra as a service or for convenience is all personal. As far as dealerships are concerned, I love to haggle for small amounts, maybe I am

Originally Posted by Samurai

If you check this post[/url], IRDA fined Maruti Insurance and not some dealer.

Maruti lnsurance Brokers Pvt Limited (MIBL), the largest insurance broker in the country

Yes, because Maruti had setup their own agency to do the insurance and were forcing dealerships/ customers. I am not aware about other companies but New India, with whom we have contract, refused to give any lower rates when I bought the Gypsy. The appointed broker paid us back in cash as they can’t show the lower rates on the policy.

With Kia & MG, there are no such issues, some dealerships are doing at their own level.

[Samurai]

Originally Posted by Turbanator

Do you think the extra monies that dealership gets from customers by charging higher rates goes to the manufacturer?

If you check this post, IRDA fined Maruti Insurance and not some dealer.

[drmohitg]

Originally Posted by Samurai

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.

But then one cannot justify their actions in the name of survival or validate their deeds as a right to choose their customer.

[Samurai]

Originally Posted by drmohitg

But then one cannot justify their actions in the name of survival or validate their deeds as a right to choose their customer.

Um, why not? Profit making companies routinely layoff people, without worrying about how they are impacting lives of 100s of people and their dependents. They usually only worry about violation of law, because they can get fined. Morals/Ethics have a very vague place in big business.

This is how the thinking goes: https://smallbusiness.chron.com/layo...ess-66493.html

Anyway, this is getting off-topic now. It has been already established that the dealer was breaking the law set by IRDA. So law will take its course.

[Sankar]

You went to buy chilly chicken from Pooh's* Chicken Corner near you.

Pooh's wants to pack your chicken in Peng's** carry bag for an additional sum of Rs.10 per bag. Peng is a bag seller next door and most probably its Pooh's benami shop.

You already have a carry bag with you bought from elsewhere for Rs2 and you dont need Peng's bag. Seeing another bag in your hand Pooh loses his cool and says "Buy Peng bag. No Peng bag no Chilly Chicken for you"!

I'd say try Chicken Tandoor instead.

* Pooh = car dealer
** Peng = dealer insurance agent
--

If this is a car manufacturer brokered insurance coming through their own brokerage house sold under car manufacturers name (toyota protect for eg) then it can be different. The bag might actually be special and you will get another chilly chicken free if the bag breaks on your way home. So it may be worth the extra Rs.8 if you are risk averse.

Edit: Maybe you still won't get another hassle free chilly chicken even if its a manufacturer branded bag. (50 shades of black with Chola Motor Insurance - Terrible claim experience)

[bhansali_hardik]

Been there done that for sonet in launch month, escalated it and spread the word as well. Ask them to give it in writing and they’ll start getting reasonable. Ask them to match the quotation, if you’re taking loan the banks will cut your insurance price to a great extent (provided its financed through them and not through the showroom) I could push the dealer for a hot selling cake with relatively a very small amount of a purchase compared to yours! I’m sure arm twisting will get you what you want! Sad state of affairs but there are governing bodies out there! IRDAI is setup for the same reasons! Try some arm twisting if you really want the car or switch dealers or even cities or states! There’s someone out there still being honest don’t lose hope!

[rkw]

Originally Posted by astrodex

I had a very strange experience
Any ideas how much the insurance gets them? Is such experiences common?

Sorry to know your experience. But it is a regular practice of packaging done by dealers to offer hassle free deals & in the process maximise their profit. Dealer margins comprise a combination of sources - vehicle sales, insurance, registration charges, accessories, detailing etc. which are one-time & then the prospect of recurring scheduled service & running repairs. Foregoing or reducing one or some depends on how much the dealer is able to set off from the rest. All above one-timers may be sacrificed if sales is the only criterion (year end, stock clearance, slow moving model etc.)
As much as buying is the discretion of the customer, selling is the discretion of the dealer. Dealers seldom are able to exercise this discretion in a highly competitive market. The opposite is true for the customer. In your case it seems there is an element of monopoly or huge product demand.
I don't see violation of any law here as the dealer hasn't refused on record the sale on account of not opting for bundled package. Trade-off between profit & ethics is a different dimension.
Insurance margin is substantial which I can tell from experience as well. For my Creta in 2019, the dealer quoted Rs.82k for insurance. I was getting the same package for Rs.52k online. The dealer agreed to offer at the same rate when informed about my decision to purchase online.

[Mortis]

Originally Posted by Dry Ice

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

Nothing ! My point being that just as most customers accept the dealers inflated insurance quote or the unnecessary extras at the time of servicing their car because they don't know better, similarly they would have the tendency to "renew" their insurance rather than "repurchase" it every subsequent year and end up paying more each time they do.

[iamkapilb]

This is a very interesting topic, and close to heart as I am also looking to buy a car and am facing the same issue. But I am happy to read the diverse viewpoints on this thread. Thank you all for sharing them, very informative!

In my car purchase experience, the dealers who are bundling in-house insurance and preposterously priced unwanted accessories amounting to at least 1.4L additional money on a 20L Creta, are willing to hand over the car immediately, vs. a long wait if you don't shell out this money - I've been waiting 3 months now. This leaves a bitter taste.

More importantly, I would like to know if dealers are legally allowed to sell overpriced bundle in this seller's market (creta, Seltos etc.)? For a moment, ignore insurance where there is a governing body (IRDA) and perhaps some laws are being broken by forcing sale of insurance. What happens if they enforce buying a bundled accessory package or no sale? Isn't that a legally safer way for dealers to make quick bucks? For example, let's say dealer doesn't put any restriction on insurance, but at the outset says sale of accessories worth 50K is mandatory, take it or leave it - would they be breaking any laws even if they are the only dealer in the city? In a comparative scenario, I don't think a seller is doing anything illegal (or unethical) if they choose to bundle say tripod with a DSLR and not willing to sell DSLR standalone. Are these two scenarios comparable?

I wonder why dealers are choosing to fight the battle on insurance, which puts them on shaky legal grounds? Is it because there is a larger population who will revolt if they enforce mandatory accessory sale vs. charging extra on insurance?

[Ph03nix]

If the dealer is trying to pull a fast one why not return the favor.

Return the insurance policy in the free look period and buy another one?

[Turbo Head]

I have been buying cars since 2 decades, it never happened with me that car dealership had arm wrested on Insurance or even registration, though latter do save you some hassles, if done through dealer channel. I simply discuss the ex-showroom price of the vehicle and any discounts over it. I politely but firmly refuse any other charges, including Insurance, logistics/handling, stockyard, parking, essential accessories, protective coatings etc. If anyone has any issues with it, I leave the deal and go for different dealership (thankfully you get too many options in NCR).

Same goes with Superbikes, they keep on insisting for getting it financed and insured from them only, but I politely refuse them stating that I am getting a better deal from my bank.
Another good trick is show them quotation from policybazar or any third party website and ask them to match it.

[landcruiser123]

Another point:
In the free market, one normally expects bundling of services via a single company is supposed to cost you lesser in most cases.

1. Airtel gives you a discount on bundled broadband + phone.

2. AT&T gives you "free streaming" services when you use higher-priced their unlimited plans. (Net benefit due to lower costs)

If MG & Maruti have their "own" insurance policies, wouldn't it be a fair expectation that those would actually beat the market rate?

[tilt]

Originally Posted by Ph03nix

If the dealer is trying to pull a fast one why not return the favor.

Return the insurance policy in the free look period and buy another one?

Huh? I have never heard of this. Woud you kindly elaborate for someone who is not familiar with this; and whether this is applicable to all insurers in India; ands whether this is a legal requirement?

Thanks and cheers

[Sankar]

Originally Posted by Ph03nix

If the dealer is trying to pull a fast one why not return the favor.

Return the insurance policy in the free look period and buy another one?

Originally Posted by tilt

Huh? I have never heard of this. Woud you kindly elaborate for someone who is not familiar with this; and whether this is applicable to all insurers in India; ands whether this is a legal requirement?

Thanks and cheers

Freelook period is 15 days and is only applicable to life insurance.

So don't try to pull anything on anybody. If you are not getting the deal you are looking for just walk out.