[vinay5795]

Originally Posted by pranad

The road tax at 20% in Telangana should amount to Rs. 13,16,200/- however the total as shown below in the screenshot from the quotation given to me by Lexus Hyderabad is Rs. 13,66,200/-

There is still a further amount of Rs. 5,865/- which is unexplained in the above breakup. The PDI charges of 40,000 are wholly unjustified as per multiple consumer court orders, Supreme Court directions, a Delhi High court order and multiple circulars issued by RTO Telangana. However, dealers seem to think of themselves as above the law and charge these illegal fees without justification. When I took this issue up with the GM, Lexus Hyderabad he brazenly said this is company policy and there is nothing he can do to change it.

I too was charged 25000 Rs handling charges while buying Ninja 1000 from Kawasaki Hyderabad. They refused to remove it.

[Theyota]

If the OP had agreed to a total on-road price that is reflected in the proforma invoice above before booking the car, he shouldn't care less about what head the dealer breaks down the total costs into. That seams to be the case here. If the dealer added additional costs over and above an agreed booking price, that is for sure a deceptive practice.

Regarding the notice from Road Transport Commissioner, I doubt the road transport commissioner has any legal authority to issue such notices with regards to breakdown of various service charges. Probably, that is why the dealers choose to ignore such notices.

[anandhsub]

Originally Posted by Theyota

Regarding the notice from Road Transport Commissioner, I doubt the road transport commissioner has any legal authority to issue such notices with regards to breakdown of various service charges. Probably, that is why the dealers choose to ignore such notices.

The road tax is calculated on the ex showroom price. It is tax fraud to add other charges on the invoice without including them in the ex showroom price.

[V.Narayan]

Originally Posted by Hayek

But if you look at the quote posted by the OP, it says Registration Charges plus TR, PDI etc. Yes that could have been spelt out but it is certainly not underhand. The fact is that nothing happens at a dealership without OEMs being aware of it. They set their commissions knowing fully well that the dealer will make some money on such heads (and that some of these heads are needed to deal with costs the dealer incurs which the OEM would not be willing to bear).

Originally Posted by Theyota

If the OP had agreed to a total on-road price that is reflected in the proforma invoice above before booking the car, he shouldn't care less about what head the dealer breaks down the total costs into. That seams to be the case here. If the dealer added additional costs over and above an agreed booking price, that is for sure a deceptive practice. Regarding the notice from Road Transport Commissioner, I doubt the road transport commissioner has any legal authority to issue such notices with regards to breakdown of various service charges. Probably, that is why the dealers choose to ignore such notices.

Thank you Hayek & Theyota. Very sensibly put. I suspect we are in a minority on Team BHP.

In India the concept of MRP for some consumer goods, while being a good thing for retail, has created a thinking amongst the buying public that a MRP like number must apply everywhere for all purchases of which a car is usually the biggest retail purchase. The cost of the distribution of the car from factory to store to PDI to showroom including the inventory holding cost has to feature somewhere. Either it goes into a higher ex-showroom price or it goes into extras like we see in the two invoices on this thread. While I agree that some dealers in some places indulge in unscrupulous practices and should not be condoned I also notice a tendency on Team BHP to view charges by a dealer as spurious by definition and then a noisy echo chamber follows. If the dealer quoted price XXX when we decide to buy and our final bill is price XXX then the break-up is merely detail.

On the point of insurance some members brought up - I always buy my insurance through the dealer because at least for me the service and speed is worth the 1% or 2% extra premium he has probably charged. The trick with car dealers is to first be a lucrative customer {to be on interest to him} and then to be a very strict customer where service or quality goes {to be of value to ourselves}. Most customers do not learn how to be a very strict customer and from there arises this fear of the dealer being a eternal cheat. Just my views others are likely to disagree.

[mango_pal]

Originally Posted by Hayek

But if you look at the quote posted by the OP, it says Registration Charges plus TR, PDI etc. Yes that could have been spelt out but it is certainly not underhand.

...

Posting the pro forma invoice for my own Tiguan - there was ~₹51 k as service charges for registration and ₹ 20 k depot charges. Don’t see anything underhand...

Apples and oranges, Sir.

In your case, it was cleanly mentioned that they're taking a service charge for registration. Whether or not that is legal is debatable, but at least they are being transparent about it & you were willing to live with the service charge because well, peace of mind!

In the OPs case, they added a whole host of abbreviations. One wouldn't have even thought to check as at first glance they seem immaterial.

Then there's the case of the Rs. 40,000 PDI and the unexplained Rs. 5,865.

What on earth warrants a 40,000 rupee PDI? Are they buying a tablet to do a scan for his car? Is it a super specialized service where they pay the PDI inspector the same amount as a High Court lawyer? Or is it a case of poor business practice and trying to pull a fast one?

What is the unexplained Rs. 5.8K: are they planning to give the OP a full tank of gas, which Lexus is known to do? Excellent! But be transparent about it.


Lexus is known for being the absolute best in terms of customer satisfaction. This is definitely unexpected from a dealer of a brand which has created such a strong reputation for customer delight.

In your case, not surprising at all from VAG. As someone who has owned 4 VAG cars, I'm happy to swap stories with you about the terrible ethics I've faced with them over the last decade.

[akg7091]

A pre delivery inspection is something that the dealer does for HIS benefit more than the customer's - till a car is sold it is on the dealer books and they have to inform the OEM about any issues with the cars that they receive in a lot for them to be resolved. PDI is one of the "core" tasks that any vehicle sales outlet has to perform and the cost for the same must be absorbed from the margins they make on the sale. If the margins are insufficient the dealers should ask the OEM to increase the same and let the OEM increase the ex showroom prices if need be. If this trend of handling charges is not stopped soon we will have charges like "showroom rental", "coffee machine", "staff salaries" etc as additional line items in the invoice. The dealership is supposed to cover all their overheads from the margins they make on the sale instead of harassing customers by including x different charges hidden on an invoice.

[Turbanator]

I am a little surprised at some comments.

Respectfully, I have to disagree a bit. Not a single premium dealership here in North atleast, whether it's BMW, Mercedes, Porsche or for Bikes, will agree to a sale without asking for Handling charges. I have tried to reason, but they refused to make a sale. Now, as I mentioned before, when a seller is giving a proper Invoice which includes GST and is paying Income taxes on such income, how can we say it's illegal?

If I have to talk about my own experience, we even paid Handling charges on a Yamaha Aerox scooter

Here is what I think can be the reason - Manufacturers charge the Transportation freight and PDI expenses to the Dealer separately because including them in the car invoice will mean charging GST at higher rates resulting in higher costs to the customer. For example, if BMW has to ship a 3-series from Chennai and the dealer has to prepare the car for delivery after some checks, the customer has to bear the cost. Now by adding this amount under a different heading- Transportation/ PDI - the manufacturer can invoice at 18% GST whereas by including these costs in the cost of the Car, it will attract GST at higher rates of 48-52%

There were some demands by Taxation authorities asking Excise duty on these as some of the manufacturers were showing these separately and not charging these under the higher Tax slab (applicable on the Motor Vehicle)

Here's one such judgment. If someone owns a dealership, he can better confirm the current status.

https://taxguru.in/excise-duty/pre-d...-vehicles.html


In the MRP regime, it does sound wrong but illegal, not sure. I hope this post makes sense.

[ravimittal99]

Have to agree with Turbunator. PDI charges are common even if you buy smaller cars and they are not waived off. Lexus Hyderabad does charge that much PDI and I'm a proud owner of an es300h which I bought from them having paid the PDI charges and I also bought a Honda City recently where the same was approx Rs. 5000 as far as I remember.

During my visit to BMW and Mercedes, they were charging the same, around Rs. 50000, so seems like an industry norm based on price range of cars. Can this be deemed legal or not, well it's upto the dealer what they want to charge beyond govt rules, it certainly doesn't stop them for adding any cost they wish to. After that, it is upto you if you wish to buy or not. The same example can be give if you buy an oine movie ticket which charges convenience fee or food delivery apps which charges certain fees and charges.

I have found Lexus and Lexus Hyderabad to be among the more ethical people with respect to pricing and service. As much as I was miffed as you when I saw the PDI charges, I have come to a realization about it since all brands and dealers have these charges and nothing which stops them from doing so.

[gb97ce6]

Is it possible that these extra charges eventually end up as bribes for registering the cars? I mean, it’s a known fact that nothing happens at Govt offices without money. For every single paperwork the bribe is fixed as a percentage. Why would the dealer pay for it out if pocket? But if that’s the case the dealer can simply say it goes under the table but may be they don’t want to explicitly tell the customer? Could this be a possibility ?

[Drpaul]

Very interesting thread. Glad that OP took this up. Admire people like him who are willing to stake time, effort, and the ridicule of some people, to go the extra mile to try and set things right when one feels he has been taken for a ride.

Most will pay up even without question if it's printed. (Till date I don't know what "special fee" is in school fees break up means ). Peace lover or cowardice? Or sensible? Debatable

Fully agree with Turbanator. What he says makes sense. But if it's illegal it has to be questioned and stopped. One has to live according to the law of the land knowing fully well that "illegal" and "unfair" are two different things. Take, for example, the ruling stating that bottled water should be sold only for 20/- everywhere from 5-star to street vendors. I thought it was unfair to the seller.

Hope we will get to know if this practice of the dealers/sellers is legal or fair?

[V.Narayan]

Originally Posted by mango_pal

I respect car dealers who are transparent about their handling charges. Such an under-handed way of hiding it within registration charges is pure deceitful; and if not for the excellent observation by the OP, it would never have been found.

How can one establish trust in a dealership if they are intentionally being deceitful? Where does the deceit end? What's to stop the dealer from swapping out OEM components and making a quick buck before delivery?

My recommendation to the OP is: doing business with the people who represent the brand is critical. If you don't trust them, don't do business with them, and take your business elsewhere.

Best course of action: if Lexus steps in and takes the necessary action against the dealer ensuring 100% transparency.

Are we jumping too far to conclusions before even all the facts are on the table? Let the OP complete his homework with the Dealer/Lexus and then lets conclude whether this is a gap in communication and expectations or the dealer trying to pull a fast one.

All,

There is a big difference between a charge that is illegal and a charge that out of differing perceptions the buyer and seller disagree over. On social media I observe a tendency amongst writers to jump to conclusions, declare guilty verdicts and use strong language even before all the facts are on the table.

On Team BHP there is a sub-culture that any charge a dealer levies, that the buyer doesn't like, automatically becomes illegal! A charge can be illegal only in a regulated industry such as insurance or some parts of banking for example. In an unregulated industry where pricing is free buyer and seller may disagree on a line item but that does not make the line illegal it is merely another commercial point to be thrashed out.

Three D-BHPians with a long history of purchasing high end cars have shared that such PDI is market practice for such cars with charges ranging from Rs 50k to Rs 90k. In fact when I called up my Lexus dealer on this point yesterday he exclaimed that the Hyderabad dealer has given a big discount to the OP {Rs 40k instead of Rs 90k} and is spoiling the market! - there are always many points of view to every subject.

[GTO]

Originally Posted by Hayek

No point making a fuss about these things.

40000 is a lot of money. And it's also a matter of principle.

Let's not forget that it is the OEM & dealer's basic responsibility to deliver a perfect new product to us. Now, we should be paying them for that checking (which a PDI is)?

Auto dealers are in any case not a very profitable business

The customer shouldn't have to care about this aspect. Would you pay Vodafone 4000 bucks / month for your mobile phone bill just because Vodafone as a company is struggling?

If you are not ok, buy something else

That might sometimes not be an option because (as an example), there might be just one dealer of the brand in the city.

That doesn't mean we pay anything & everything the dealer asks for. There's a big difference between fair business practices and getting royally ripped off.

But getting ornery about the dealer charging for something for which he is issuing a receipt does not make sense in my view

Dealerships also issue bills & receipts for "engine coating", "condensor cleaning" and other rubbish at the time of servicing. By this logic, we should be okay with that too? Absolutely not!

Originally Posted by Hayek

The fact is that nothing happens at a dealership without OEMs being aware of it.

I believe the company & dealership are working on making things right for the thread starter. Will let him update with latest happenings. Clearly, this shows that the company itself disagrees with you.

Posting the pro forma invoice for my own Tiguan - there was ~₹51 k as service charges for registration and ₹ 20 k depot charges

Frankly, just because you are fine with paying all inflated charges doesn't make them right. In fact, the authorities have frequently shown anger at dealerships charging handling / depot charges to pad up the bill.

If I may be frank, you got royally ripped off on paying 51k as service charges for registration. If you would've spoken to the dealer about this, they would've waved it off (or drastically reduced it). If you would've spoken to the OEM, they would've taken the dealer to task for this. 51000 looks like highway robbery to 99% of us, but you are clearly in the other 1%.

[Turbanator]

Originally Posted by GTO

And it's also a matter of principle.

51000 looks like highway robbery to 99% of us, but you are clearly in the other 1%.

Correct, but perhaps a lot of us have resigned to such things for varying reasons. I am sure no one will like to part with anything beyond what's required.

I believe the company & dealership are working on making things right for the thread starter.

That's super nice. I know for sure that the top Lexus guys have great respect for our portal and, in particular, for you. All thanks to you, this was possible

As I mentioned before, if one manufacturer takes such a step, others will also have to follow.

this shows that the company itself disagrees with you.

Technically, it's a difficult position for the manufacturer. Because MRP is supposed to include everything (delivery & any pre-delivery checks, too), maybe the margins for the dealers are not enough, so they keep devising new charges.

I faintly remember paying for cooling charges on ThumbsUp when the retailers would ask extra over the MRP for a cooled bottle some four decades ago

[GTO]

Originally Posted by Turbanator

Correct, but perhaps a lot of us have resigned to such things for varying reasons. I am sure no one will like to part with anything beyond what's required.

See, I agree there are times that we will have to compromise. Example, if I want to buy a hot selling model right now which has a waiting period, I know that I will either have to buy insurance from the dealer, or pay for some useless accessories. I will if I really like the car & had advised a member as such who was in a similar predicament.

But I will still criticize the practice and call it out as wrong, not justify the practice or call it right. I will voice my disagreement.

I faintly remember paying for cooling charges on ThumbsUp when the retailers would ask extra over the MRP for a cooled bottle some four decades ago

Govt protects customers now, bro. Just one of the many moves - https://timesofindia.indiatimes.com/...w/90579529.cms

[Hayek]

Originally Posted by GTO

40000 is a lot of money. And it's also a matter of principle.

If I may be frank, you got royally ripped off on paying 51k as service charges for registration.

Principles are obviously something one cannot comment on - each of us has our own principles when it comes to spending. ₹40 k may be a lot for money for someone buying a typical ₹10-15 l car, but the OP is buying a Lexus that costs ₹75 l+ OTR, and should be looked at in that context.

As for the ₹51 k, I obviously shopped around with the other VW dealers in Mumbai - the fact is that my ex showroom was ₹2 l + less than the second best offer, and the add ons above ex showroom (beyond the registration paid to the RTO) were ₹20 k more (even if labelled differently) in the second best quote.

Am glad for the OP that thanks to Team BHP and his strong reaction, Lexus is taking the call that ₹40 k is peanuts in the context of a ₹75 l purchase, and seems willing to waive it. Am willing to bet that the dealer would be compensated one way or the other for this. Just as I doubt the ₹2 l discount I got came from the pocket of the dealer - there must have been some economic driver for him to have given me that deal.