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Old 19th December 2009, 00:24   #1
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Default Do dealers get a cut from the road tax & registration charges?

Hi everybody - I'm going to get a Mitsu Cedia very soon. The dealer is asking Rs. 42000 for road tax & registration. While I requested to give me a break-up of that amount they are coming up with reactions like - 'you are the first cuswho has ever asked for this' etc. and seems to be very reluctant to give me the break-up. They are telling me that the registration fee is payed by the dealer to the registrar and there would be no receipt from the regiastrar in my name. Is this right? I am having a sneaking suspicion that they are hiding something here. If you guys also think so then I'd stick to my point and keep asking for the break-up until they give way. If you think what the dealer is saying is reasonable enough then I'd stop making the fuss. So please advise. As always - thanks for every input.
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Old 19th December 2009, 02:06   #2
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I dont know if they get a cut from it or not, but it is surely costly to get the vehicle registered from them. I always avoid getting my or my friends cars registered through them.
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Old 19th December 2009, 09:35   #3
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Can I get the delivery of my car without getting it registered through them?
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Old 19th December 2009, 09:38   #4
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Yes they charge 5 - 10k more than actual charges.

You can save this amount if you do the registration yourself. Talk to some RTO broker, he would not charge more than 1k for the whole thing.
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Old 19th December 2009, 09:41   #5
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Yes they have a healthy margin on that as they include "agent charges" in it. In reality the agent charges no more than 3000rs. But since most customers never doubt the tax amount the dealers add a profit that they desire! For example the on the bmw they charged almost 16000 over and above the actual tax amount !! Best way to know is to calculate the road tax % by ex-showroom price.
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Old 19th December 2009, 10:52   #6
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I don't think the dealer gets a share from road tax & registration. The cost of the vehicle ex-showroom is always higher than ex-factory. AFAIK manufacturers profit is included in ex-factory cost and the dealers profit + handling and logistic charges are included in the ex-showroom cost.
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Old 19th December 2009, 11:07   #7
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As per CMVR, the dealer is supposed to deliver a vehicle with registration. That can either be a TR or a full registration. I suggest you find out what is the applicable Tax % for your category of vehicle in WB and then calculate it accordingly. When I bought the vehicle, I was given a tax receipt which was in my name and I don't know why it should be any different anywhere.

Dealer agents generally charge a higher amount than the RTO agent.
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Old 19th December 2009, 11:08   #8
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Road Tax : goes to the RTO. You will get a receipt from the RTO for that, and this will definitely have your vehicle registration number.

Registration charges : It is actually very less. The dealers typically show a bundled amount titled something like "registration & handling" - and this can amount anywhere between 5k - 10k, or more if the vehicle is a premium car. Most of this is eaten up by the dealer, and some by the official at the registration desk. And this is the reason he is not ready to give you a receipt.

To get the exact figure, go the RTO with relevant details - make, model, engine capacity, length of vehicle, etc. And ask for the relevant details.

Just in case you are going for a CLC, then ask the dealer for a receipt for that amount. He will give you a receipt for the "registration & handling" and this can be given to your company as expense to be claimed against the car.

And, shop around for insurance. You may save upto 30% on what the dealer has quoted. The amount of saving will depend on how much the dealer has inflated the price, and how good a quote you get from your insurance agent/agency.
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Old 19th December 2009, 11:18   #9
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Dear agnisumita
good that you brought this topic up.
i had a similar exp. when i got my Ritz.
the registration amount(incl. life tax) is 8% of the ex-shrm price in chennai. it may be on similar lines in your state as well. however, the registration amount listed by the dealer was at least 8000 more. when i asked for a break up they said it included other exp. like ext.warranty, fuel exp. etc. after a bit of arguing i managed to get back a portion of that 8k after a long wait and in the form of accessories(which would have reduced the dealer outflow).
unfortunately, getting your vehicle registered yourself is not a good idea as the dealer seems to be the lesser of the 2 evils. my advice would be to let the dealer do the process and then ask for documented accountability.

Last edited by sterlingjames : 19th December 2009 at 11:19.
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Old 19th December 2009, 11:18   #10
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I agree. Dealers make a quick buck. Worse is NCR.

I found that delhi Maruti dealers charge about 1250 bucks more for Swift D (a 5L car) compared to Gurgaon dealers, for a car to be registered in Gurgaon!!

I still went with it because of lack of time/a reliable agent who'd get my job done and much less waiting time at the Delhi dealer. In your case, the amount is BIG. Please DIY!
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Old 19th December 2009, 17:14   #11
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Not only do dealers make a tidy packet from registering your car (agent charges...LOL!), but they are also known to misrepresent the actual taxes. I've seen the RTO taxes being bumped up by as much as 25% over the actual amount paid to authorities. Agnisumita, please tell your rogue salesman to provide you with a proper RTO receipt and the exact breakup. Else register the car yourself. I did that for my Lancer (Nasik RTO) and it hardly took a couple of minutes (with the right agent of course).

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Old 19th December 2009, 17:33   #12
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Try finding out the road tax applicable in WB. AFAIK, in WB it's based on the engine cc and not a % of the vehicle cost.

In WB, the PVD dept provides you with a token upon tax payment that has all details , and the dealer must provide this to you alongwith the full breakup of anything lse he is charging.
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Old 19th December 2009, 17:49   #13
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1. There are plenty of threads like this see the "similar threads" below.

2. Road tax and regn. fees are fixed; what they do is over quote you - means if the fee is Rs. 15, they will claim to have paid 150/-; and claim that the remaining amount is bribe.

3. Again, you can obtain a registration without paying bribes; be prepared to run around.
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Old 19th December 2009, 18:02   #14
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Road Tax- the percentage of tax payable on the showroom value of the car differ one state to another ( in kerala it is 6%)

Registration charges - it will be under Rs.500/-

When one do the registration formalities through the dealer, they charge anything
between Rs.3000 to 5000 (may be more).

When I purchased my car, the dealer asked Rs.3000 for only the services.
However I have told them that I will do on my own. He agreed for same.

I just went to the RTO office got one Agent (since I dont have time to stand in the
que and do the follow ups) at a lumpsum fee of Rs.250/-. Registration charges+ cess
Rs.350/- . My saving is Rs.2400/- (Road Tax in anycase same and you will get a reciept for that).
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Old 19th December 2009, 18:28   #15
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Vehicle cost should be arrived as follows:

1. Ex-Factory Price = x (the dealer margin is already included in this)
2. VAT @12.5% = y (not sure if it differs from state to state)

Ex-Showroom Price z = x+y

3. Liefetime Road Tax = r% of z, where r varies from state to state (check on the kolkata rto website, in chennai it is 8%)

4. Road Safety Tax = s where again it may vary from state to state..it can be a % of z or a fixed amount, like in chennai it is 1500/-

5. Any other tax - may be fixed by speficic RTOs and can vary

6. RTO Fees - may range from 150 to 500 bucks

Apart from the above, every single penny that is charged goes to line up the dealer's pocket. Normally, the practice is to charge appx 5K extra. My dealer in chennai explains the same as below:

1. Number Plate cost 500/-
2. Insurance cost while the vehicle is in transit from factory to dealer showroom
3. Driver cost who will drive from the dealer stockyard to the showroom, then to RTO and back
4. RTO agent charges (palm-greasing??)
5. Fuel cost
6. Maintaining/cleaning/shining the vehicle till it is handed over.
7. Chocolate box/pooja charges which is normally given at the time of handover. At this time whatever cash you tip, goes directly to the salespersons and others around..the dealer has to stil bear the cost of those garlands/lemons etc!!
8. Temporary regn cost till the final regn in a customer's name is done

The reason a full breakup cannot be given is obvious from above. Hence everything is clubbed as regn+handling charges.

In my opinion, around 5K is justified if you see the various costs involved. We would be naive to think dealers will forego this cash outgo (like any business man will do). Further, please note that vehicle buyers are not some grocery buyers where loyalty is rewarded with spot discounts - once a vehicle is purchased, the buyer may not be back for at least 5 long yrs on an average). Retail/Walkin repeat customers for a showroom dealer is virtually next to zero. So why should he oblige.

Regarding regn, if you do appoint an agent yourself, it will cost some 1500/- but if you do it yourself, it should come to <500 (actual RTO fees) not taking into a/c fuel costs etc.

But be prepared to spend a day in the RTO.

Anything above 5K is the range where a showroom dealer is willing to negotiate, giving us customers a feeling that he is doing a favor. I bet none of us can eat into this 5K margin (unless the dealer is a long lost classmate of yours).

The ex-factory fixed margin which the dealer enjoys goes into running his enterprise. Other margins from wherever he can squeeze in is addl profit - but rest assured, this margin does not make him a millionaire, going by the number of vehicles a showroom sells.

Hence we should not be cribbing about a couple of K's here & there IMHO.

PS: Am not dealing in cars. The above cost is common sense calculations and my own experience while purchasing a vehicle recently.

Last edited by sanjayc : 19th December 2009 at 18:34.
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