Why handling charge is collected from customers?

vsk2009 · 11th October 2010, 15:10

Why dealers/company charge handling charge/transportation charge apart from Exshowroom price? Why can't they include it in Ex showroom price? What are the additional charges that are added to Ex factory price?

supremeBaleno · 11th October 2010, 15:16

This is one of the many rip-offs indulged in by dealers. I believe the manufacturers do not have a hand in this, other than not stemming this skimming by dealers.

Ideally, only taxes and insurance should be added to ex-showroom price. But my experience shows there are loads of extras added - seen this with bike dealers too. Will post in detail later.

ghodlur · 11th October 2010, 15:30

Quote:

Originally Posted by vsk2009

Why dealers/company charge handling charge/transportation charge apart from Exshowroom price? Why can't they include it in Ex showroom price? What are the additional charges that are added to Ex factory price?

I was told that the handling charges are for the safe keeping of your vehicle at the dealer stock yard after the vehicle alloted to you arrives. This is actullly a rip off.

I was asked to pay 2.5K as handling charges by the Ford dealer when I booked Fiesta which I bluntly refused. Later when I did a trip to the dealer stock yard for PDI I was horrified to see the Fiesta's lying in open area among the grown weeds after the monsoons. The handling charges was for holding the vehicles in such pitiable condition.

shankar.balan · 11th October 2010, 15:33

under ideal circumstances like in the case of the rest of the retail industry there should be one single MRP for any car/ SUV/ vehicle in India. All this nonsense about allowing each state to decide its own taxes etc should be abolished. After all we are supposedly one country arent we?
Same logic should go for price of petrol and diesel fuel.
I cannot digest why it is that the residents of an UNION TERRITORY like Pondicherry or New Delhi should pay less for vehicles and less for petrol and diesel fuel when compared with the rest of India.
Nor can I digest the fact that the ON Road prices for vehicles + the prices for Fuels in Bombay and Bangalore are absolutely the highest in India.

akhilesh51 · 11th October 2010, 15:35

Handling Charges indeed are devised by companies / manufacturers and are regulated by them and not by dealers as has been reported.

The crux of the problem is stock yards. With increasing vehicles sales, stocks of dealers have also risen manifold causing stockyard problem. Hence, Dealers have to look at rented spaces or surplus land.

Hence, Manufacturers put an extra handling charge on the vehicles to be taken by dealer. Question arises why the same can not be incorporated in Ex-showroom prices. Answer to this is varying cost of land rentals in different cities whereas ex-showroom price and dealer margin are mostly fixed.

supremeBaleno · 11th October 2010, 16:38

Quote:

Originally Posted by akhilesh51

Handling Charges indeed are devised by companies / manufacturers and are regulated by them and not by dealers as has been reported.

I don't think this is the case. If so, I would expect the charges to be uniform across dealers of the same brand, which is not what I have observed.

Quote:

Originally Posted by akhilesh51

The crux of the problem is stock yards. With increasing vehicles sales, stocks of dealers have also risen manifold causing stockyard problem. Hence, Dealers have to look at rented spaces or surplus land. Hence, Manufacturers put an extra handling charge on the vehicles to be taken by dealer.

Also about your logic of stockyard problem, that is clearly a dealer issue and if there is a cost to it, it is incurred by dealer. Then why should manufacturers put an extra charge on something that concerns the dealer ?

Quote:

Originally Posted by shankar.balan

under ideal circumstances like in the case of the rest of the retail industry there should be one single MRP for any car/ SUV/ vehicle in India. Same logic should go for price of petrol and diesel fuel.

Agree with your logic and hopefully one day we will have a uniform tax structure across the country. But atleast this is regulated by law. If I pay more for petrol in Chennai (than in Pondy), atleast I am sure that the extra goes to the Govt.'s tax kitty. This is different from the extra charged by dealers.

aargee · 12th October 2010, 13:02

I was told that handling charges are for taking the vehicle to & fro to RTO & the expenses towards it. But again this was for a motorcycle & the charges were Rs 500. He didn't agree to hand over the motorcycle though I was ready to pay the entire amount of motorcycle in cash.

I definitely agree, handling charges are pure rip off.

manishalive · 12th October 2010, 14:36

My two cents,

1. The warehouses are on open lands, outside the city limits, with no protection at all. These are operated by third parties. Professional warehouses with enclosure are costly and are only at Major Hubs / Ports.

2. The ones we are discussing are hired by the manufacturers for catering to the needs of the 2 or 3 dealers, as the products are more retail (i.e. off the shelf availability).

3. Normally any company charges extra for immediate delivery (altleast in heavy machinery). But then this charge (handling) is totally in scope of Dealer as is between the Manufacturer and the Dealer unless other wise stated. And should not be charged.

wanderlust · 12th October 2010, 14:55

Handling charges are the monies used by the dealers to pay the agents through whom they get the registration of the cars done. The money goes to a few hands - the agent who handles the documentation for registration, grease required to speed up the process, the license plate stickering and printing etc.

This was as explained to me by the sales person at Concorde when I bought my Safari 3 years ago.

And if it were included in the ex-showroom price, we would all have to pay road tax on it!

NevGin · 12th October 2010, 15:02

Is the handling charge being talked about here the same as what they call "Depot Charge"? If it's the same, this charge is pointless and has screwed my budgeting for each new car that I have ever bought.

Abhas · 12th October 2010, 18:08

I recently visited a GM dealer in Chandigarh for the discounted Optra Magnum. He told that apart from the car price, I would have to pay "Transportation Charges" for the car which amounted to 4.5k !

Wondering why should we pay for transportation of the car from the manufacturer to dealer showroom ! Never heard that for any other manufacturer.Also, they insisted that the insurance must be brought from them. This is pure rip-off !

benbsb29 · 12th October 2010, 18:33

Quote:

Originally Posted by Abhas

.Also, they insisted that the insurance must be brought from them. This is pure rip-off !

SKS Automobiles who is a M&M dealer in Bangalore also mentions in their price list that insurance should mandatorily be purchased from them. I really dont see why! I am certainly not buying my vehicle from them.

kiren · 13th October 2010, 10:35

These charges differ from dealer to dealer. Tata dealers in Mumbai charge Rs.1000 - Rs.3500 as logistic charges for a Vista.

vsk2009 · 14th October 2010, 05:31

Ford has recently introduced Rs. 2850 as handling charges(Goa). I remember it was not there 5 months back. If the sails are increasing then their profits are also increasing and customers in any case should not be charged for that. Transporting the vehicle from Factory to dealer is company's responsibility and charging(if any) for it is illegal.

ghodlur · 14th October 2010, 09:21

Quote:

Originally Posted by vsk2009

Ford has recently introduced Rs. 2850 as handling charges(Goa). I remember it was not there 5 months back.

Ford dealers had this charges earlier too and is not a recent addtion. Pls bear in mind that the handling charges are not levied by Ford India but by the dealer under various guises "Depot Charges" "Handling Charges" etc etc.

IMO Ford India does bear the transporting charges from factory to dealer stock yard.

11th October 2010, 15:10	#1
vsk2009 BHPian Join Date: Sep 2009 Location: Goa Posts: 156 Thanked: 23 Times	Why handling charge is collected from customers? Why dealers/company charge handling charge/transportation charge apart from Exshowroom price? Why can't they include it in Ex showroom price? What are the additional charges that are added to Ex factory price?
	() Thanks

11th October 2010, 15:16	#2
supremeBaleno Senior - BHPian Join Date: Dec 2005 Location: Chennai / Kochi Posts: 5,676 Thanked: 2,919 Times View My Garage	This is one of the many rip-offs indulged in by dealers. I believe the manufacturers do not have a hand in this, other than not stemming this skimming by dealers. Ideally, only taxes and insurance should be added to ex-showroom price. But my experience shows there are loads of extras added - seen this with bike dealers too. Will post in detail later.
	() Thanks

11th October 2010, 15:33	#4
shankar.balan BANNED Join Date: Apr 2008 Location: Bangalore Posts: 11,797 Thanked: 27,248 Times View My Garage Infractions: 0/3 (13)	under ideal circumstances like in the case of the rest of the retail industry there should be one single MRP for any car/ SUV/ vehicle in India. All this nonsense about allowing each state to decide its own taxes etc should be abolished. After all we are supposedly one country arent we? Same logic should go for price of petrol and diesel fuel. I cannot digest why it is that the residents of an UNION TERRITORY like Pondicherry or New Delhi should pay less for vehicles and less for petrol and diesel fuel when compared with the rest of India. Nor can I digest the fact that the ON Road prices for vehicles + the prices for Fuels in Bombay and Bangalore are absolutely the highest in India.
	() Thanks

11th October 2010, 15:35	#5
akhilesh51 BHPian Join Date: Jan 2009 Location: Jaipur, RAJ Posts: 631 Thanked: 341 Times	Handling Charges indeed are devised by companies / manufacturers and are regulated by them and not by dealers as has been reported. The crux of the problem is stock yards. With increasing vehicles sales, stocks of dealers have also risen manifold causing stockyard problem. Hence, Dealers have to look at rented spaces or surplus land. Hence, Manufacturers put an extra handling charge on the vehicles to be taken by dealer. Question arises why the same can not be incorporated in Ex-showroom prices. Answer to this is varying cost of land rentals in different cities whereas ex-showroom price and dealer margin are mostly fixed.
	() Thanks

12th October 2010, 13:02	#7
aargee Senior - BHPian Join Date: Jan 2010 Location: TSTN Posts: 6,355 Thanked: 10,072 Times	I was told that handling charges are for taking the vehicle to & fro to RTO & the expenses towards it. But again this was for a motorcycle & the charges were Rs 500. He didn't agree to hand over the motorcycle though I was ready to pay the entire amount of motorcycle in cash. I definitely agree, handling charges are pure rip off.
	() Thanks

12th October 2010, 14:36	#8
manishalive Senior - BHPian Join Date: Apr 2009 Location: Bangalore Posts: 2,558 Thanked: 1,146 Times	My two cents, 1. The warehouses are on open lands, outside the city limits, with no protection at all. These are operated by third parties. Professional warehouses with enclosure are costly and are only at Major Hubs / Ports. 2. The ones we are discussing are hired by the manufacturers for catering to the needs of the 2 or 3 dealers, as the products are more retail (i.e. off the shelf availability). 3. Normally any company charges extra for immediate delivery (altleast in heavy machinery). But then this charge (handling) is totally in scope of Dealer as is between the Manufacturer and the Dealer unless other wise stated. And should not be charged.
	() Thanks

12th October 2010, 14:55	#9
wanderlust BHPian Join Date: Dec 2006 Location: Bangalore Posts: 147 Thanked: 172 Times	agent charges Handling charges are the monies used by the dealers to pay the agents through whom they get the registration of the cars done. The money goes to a few hands - the agent who handles the documentation for registration, grease required to speed up the process, the license plate stickering and printing etc. This was as explained to me by the sales person at Concorde when I bought my Safari 3 years ago. And if it were included in the ex-showroom price, we would all have to pay road tax on it!
	() Thanks

12th October 2010, 15:02	#10
NevGin BHPian Join Date: May 2009 Location: Bombay Posts: 503 Thanked: 438 Times	Is the handling charge being talked about here the same as what they call "Depot Charge"? If it's the same, this charge is pointless and has screwed my budgeting for each new car that I have ever bought.
	() Thanks

12th October 2010, 18:08	#11
Abhas BHPian Join Date: Sep 2010 Location: Chandigarh , Delhi Posts: 25 Thanked: 3 Times	I recently visited a GM dealer in Chandigarh for the discounted Optra Magnum. He told that apart from the car price, I would have to pay "Transportation Charges" for the car which amounted to 4.5k ! Wondering why should we pay for transportation of the car from the manufacturer to dealer showroom ! Never heard that for any other manufacturer.Also, they insisted that the insurance must be brought from them. This is pure rip-off !
	() Thanks

13th October 2010, 10:35	#13
kiren BHPian Join Date: Nov 2007 Location: mumbai Posts: 454 Thanked: 33 Times	These charges differ from dealer to dealer. Tata dealers in Mumbai charge Rs.1000 - Rs.3500 as logistic charges for a Vista.
	() Thanks

14th October 2010, 05:31	#14
vsk2009 BHPian Join Date: Sep 2009 Location: Goa Posts: 156 Thanked: 23 Times	Ford has recently introduced Rs. 2850 as handling charges(Goa). I remember it was not there 5 months back. If the sails are increasing then their profits are also increasing and customers in any case should not be charged for that. Transporting the vehicle from Factory to dealer is company's responsibility and charging(if any) for it is illegal.
	() Thanks