[ss212]

The fact the dealerships do minor bodywork on new cars before selling them is an open secret.

I wonder how they handle lemons or cars that are obviously very flawed.

And also, if we bargain too hard, is it more likely that the dealer would give me a car that has been slightly repaired intead of a flawless cars (assuming he has a few cars that have been repaired slightly)?

[grosserimperial]

Nice insight on the nitty grities of a car delaership operation. Your suggestion of negotiating with the salesman at the end of month is a great advice.

[adityak7]

Welcome to t-bhp Hispaniola and what a post to get started with!
All I could think about while reading your post was how much I left back on the negotiating table during my last car purchase.

Inspite of the negotiation capability, aren't discounts also a component of the sales performance of the car? I recently went to KIA showroom with a relative who was looking to purchase the seltos and the salesperson said there are no discounts (cash or kind) beyond a standard discount of 15k. On pressing the issue with the manager, he said that they are selling more than they expected and have a decent backlog of orders. Hence, they aren't inclined towards any further discounts and that we can take it or leave it.

[nbk.0707]

Welcome aboard Hispaniola, very informative and well described narrative. I also come from a similar background as previously I was heading Sales and Service for a Dealership in UP.

Although, I agree with all your points I feel that the Road Tax calculation needs tweaking as the Road Tax is always calculated at the Invoice value of the Vehicle and this amount includes the GST as well so in case of an Ex-showroom value of 5,20,000, the road tax @9% should be 46,800. The car buyers should always insist on the Road tax payment receipts for confirming the amount charged and actually paid to the RTO.

Further, for everyone's perspective the Car dealership margins works on different aspects. On the day of the Invoicing by the manufacturer/ shipping from the factory, the dealership pays the full amount and from that instance onwards the vehicle becomes the property of the Car dealership. (This is the sole reason, the dealerships deny changing your car if it has some kind of manufacturing defect and tries to repair it under the warranty.)

Usually, these payments (from dealership to manufacturer) are done through finance wings of the manufacturer itself. These finance wings being NBFCs have different interest rates on the credit facilities the dealership receives. Let's say for an example for a Car which costs/ billed to dealership @ 10,00,000, the per day interest on the amount paid to the manufacturer/ credit facility taken by the Dealership is about 140 INR/ day (at a rate of 5% only) and consider that most of the car trailers take about 10 days to reach the dealership, the interest accrued is already 1400 INR and this is only for one car, lets consider a dealership which has an inventory of 50 cars, the interest liability only is around 7,000/ day or 2,10,000/ month.

Also, as prevalent in the Indian car industry the average margin is around 2% ~ 3% of the landed price of the car to dealership, thus for a car costing around 10,00,000, the margin would be 30,000 and this amount reduces furthermore as the time for that car in the Dealer inventory increases.

To sum it up the car sales contributes very little/ sometimes negative (if the manufacturer does not have high sales numbers) in the total business revenue of the dealership. The revenue comes in from the Workshop/ Service center.

[F1-Addict]

Thanks really insightful.

Was sad to hear how new cars ODOs are tampered with. But am sure this happens across all dealerships.

- Do Car manufacturers monitor such things?
- Can they take such defaulting dealers to task?
- For a new car what should the ODO typically be? below 50 kms? or 20 kms? or more?

Just a few queries that come to my mind. Would appreciate any insights.

[Hispaniola]

Thanks everyone for the appreciation.

Originally Posted by kamilharis

Could you add a bit more regarding the warranty replacement and long term service packages schemes for the new cars ? Does the dealer benefit from this or the car maker has any strict calls on this ?

A customer once negotiated a lot for extended warranty and the manager did provide a 5k discount against a 15k 3-year warranty for Tiago. But not sure if that discount was for the warranty itself or adjusted into the margins of sale.

Originally Posted by #ABTorquey

I am keen on knowing how the service area of the dealerships function.

Since the workshop area for my dealership was far away, I have got no inside info about a workshop's functioning.

Originally Posted by adamkathy23

I would be buying a new car soon and might request you to come along.

Just get me on the phone call. Happy to negotiate for you.

Originally Posted by Stacko

In your opinion what could be the best area a newbie buyer should try to bargain and get discounts on, especially for people like me who are not good at bargaining or shy bargainers.

Thanks for the nice words. You can start by waiving off any of the handling or accessory charges. Next, get a proper quotation and compare insurance prices and also search on the web about what is the road tax structure in your state. Any unnecessary margins in these can be negotiated. And there is no difference b/w dealership or online insurances. So go ahead and tell them either they match or come close to the online quote or you will buy it from policy bazaar.

Originally Posted by ss212

I wonder how they handle lemons or cars that are obviously very flawed.

A customer once refused to buy a 90+ KM driver Nexon. The dealership then reset the trip meter and gave the same car to another customer. Other than that I have not seen any major tempering done with any of the other cars

Originally Posted by adityak7

On pressing the issue with the manager, he said that they are selling more than they expected and have a decent backlog of orders. Hence, they aren't inclined towards any further discounts and that we can take it or leave it.

Definitely, if a variant is fast-moving the team doesn't care about discounts. If not you someone else will buy it without the discounts. But still, take a checkbook next time and tell them to introduce you to the TL/GM and make them aware that you will book the car then and there if they bring some good deal on the table. The sales team knows that a bird in the hand is worth two in the bush, high chances some efforts will be made.

Originally Posted by nbk.0707

Welcome aboard Hispaniola, very informative and well described narrative. I also come from a similar background as previously I was heading Sales and Service for a Dealership in UP.

Although, I agree with all your points I feel that the Road Tax calculation needs tweaking as the Road Tax is always calculated at the Invoice value of the Vehicle

For Punjab and Chandigarh, 9% is calculated on ex-showroom minus GST and cess. A blog on cars24 mentions similar rule for Jharkhand state. For other states it is either invoice value or completely different set of rules. Thanks for bringing this in notice.

Can anyone help me edit the original post?

[riokiar]

Often Trip meter fuses are unplugged from brand new vehicles to give test drive to hot customers and plugged again after the test drive is done

Are there any telltale signs to know whether a vehicle was used as a test drive vehicle? Also, what was the usual reading on the odometer when you sold a vehicle

[Hispaniola]

Originally Posted by F1-Addict

- Do Car manufacturers monitor such things?
- Can they take such defaulting dealers to task?
- For a new car what should the ODO typically be? below 50 kms? or 20 kms? or more?

Just a few queries that come to my mind. Would appreciate any insights.

As far as I know, the software and tools to do this was provided by OEM only and costed 2 Lakh, or this is what I heard from GM

Originally Posted by riokiar

Are there any telltale signs to know whether a vehicle was used as a test drive vehicle? Also, what was the usual reading on the odometer when you sold a vehicle

ODO for us was never more than 30-40 KM. That included PDI tesdrive, washing trips to workshop and whole loading unloading practice. There was always movement of cars b/w Amritsar and Pathankot showroom since the owner was same. A simple google search will show you that the distance between these two locations is 120 KM and cars always came with fuse unplugged.

[nbk.0707]

Originally Posted by riokiar

Are there any telltale signs to know whether a vehicle was used as a test drive vehicle? Also, what was the usual reading on the odometer when you sold a vehicle

A couple of things can be noticed if the vehicle has been used extensively in Test Drives;

1. Check the wear on Tires (New Tires are very different even if the tires are greased up by Tire polish).
2. The Rubber covering on the (A,B,C) Pedals.
3. Scuff marks on the Door sill.
4. Marks on the floor/ carpet (driver side).

Usually, the odometer should be 5 kms (for Test runs in the Manufacturer's facility) plus ideally thrice the distance of the Showroom to Service Center, the cars are unloaded in front of the Service centers for Inspection then it goes to the Showroom Warehouse and comes back again for washing before final delivery. In addition to the above stated, in case of states where the registration is done after the physical inspection of the car at the RTO (before delivery), you should consider twice the distance between RTO and the Showroom.

[akash_v12]

Welcome to Team-BHP Hispanola!

Thank you for this great article! Never knew so much could be behind how a dealership runs. Lovely to see it from the eyes of a person who has actually taken up the role, I hold belief that no one knows better than them.

I'm loving these threads in our wonderful forum which shows the behind-the-scenes of this industry. GTO's earlier thread on product launches and now this!

[Rajat347]

One of my friend is a proud owner of Tata Tiago. He said that the salesman was least interested in sales pitching. But still purchased it because he wanted that car.
Also his insurance was due for renewal but he didn't get any call for renewal from Tata. He purchased ACKO this time instead of Tata's one.

I own a Honda Amaze and the salesmen were too aggressive in selling accessories and other stuff. Every time they said if you don't buy from us we won't honor your warranty.
Even they started calling me 2 months before my insurance due date.. May be the dealership earns more in service,accessories, insurance than selling a car.

[greenhorn]

Some of you might be reading this and thinking, "Wow, this is really bad, how can Tata allow dealerships to run like this?"

Well, 10 years ago it was even worse . Some fun reading
https://www.team-bhp.com/forum/india...ealership.html ("THE" Job Experience at a Tata/Fiat Dealership)

[Hispaniola]

Originally Posted by greenhorn

Some of you might be reading this and thinking, "Wow, this is really bad, how can Tata allow dealerships to run like this?"

Well, 10 years ago it was even worse . Some fun reading
https://www.team-bhp.com/forum/india...ealership.html ("THE" Job Experience at a Tata/Fiat Dealership)

Dreadful experience for the customer indeed. Anyway, things have changed now. These days a tweet is all it takes to turn things upside down for a dealership. A customer once came for a test drive right at the closing time but no one entertained him. The very next day he put a tweet about this. Someone from TATA Motors headquarters not only forwarded that tweet to the owner of the dealership but TL made sure that test drive was given to him at his house 20KMs away.

Interesting thing is even after all this, he booked foilage green Nexon. I dont want to boast about it but when we went for test drive at his home I told him what GTO always says "You have to live with the car, not the salesperson" maybe he liked that

[ayankm]

Great insights Hispaniola!!
Really loved reading your very interesting experience and the way a dealership works.

When I had bought my Nexon (XZA+ D) in Jan 2019, I had a really good experience with Concorde Motors. The Salesperson who sold me the car was a gentleman to the core.
For negotiation purposes, I had the help of a very competent fellow Nexon owner.

So at the end, I had paid for the ex-showroom price and RTO charges only.
I was given insurance at Re.1, 2 years P2P and 2 years Extended Warranty for free.

[akg7091]

Wow, this is a nice post. I am waiting for the Altroz Turbo AT to be launched. I will definitely reach out to you on how to get the best deal

Thanks again for sharing your experience