Buying a new car in India often becomes a source of stress rather than a joy. When customers enter the showroom, they face pressure from dealers to purchase unnecessary accessories, extended warranties, and insurance. Sometimes, this pressure becomes so intense that customers are forced to purchase unwanted items or are threatened by dealers with delays in delivery or cancellations. This not only violates consumer rights but also raises questions about the fairness of the market.
Dealer profits and consumer freedom
The question is, why do car dealers impose unnecessary accessories? The main reason is profit margins. A dealer’s profit margin on the sale of a new car is typically four to seven percent, while commissions on motor insurance can range from nineteen to twenty-two percent. Additionally, accessories such as seat covers and music systems also offer substantial margins. Therefore, dealers bundle the sale of the car with these additional products. They often make bookings or delivery conditional on these purchases.
The necessity of insurance and the strategy of dealers
The situation is even more serious when it comes to insurance. Third-party insurance is mandatory for every vehicle under the Motor Vehicles Act, but it can be obtained from any authorized insurance company. Nevertheless, dealers often claim that delivery will not be made unless insurance is obtained from them. This claim is false. The Insurance Regulatory and Development Authority of India (IRDAI) issued Motor Insurance Service Provider (MISP) guidelines in 2017.
Importance of Consumer Protection Act
The Consumer Protection Act, 2019, also provides strong protections for consumers in this regard. Section 2(47) of the Act defines unfair trade practices, which include deceptive practices and forced selling. In such cases, a complaint can also be filed under deficiency in service.
Need for consumer awareness
However, several consumer forums have ordered compensation and refunds, citing dealers’ arbitrary actions as unfair trade practices. Consumer commissions regularly hear such cases. Nevertheless, customers still succumb to dealer pressure. This is due to several reasons, including lack of awareness and time pressure.
Steps to the solution
Several steps are needed to address this situation. IRDAI should bring MISPs under full regulatory control. Consumers should be aware and compare insurance purchases online or with independent agents.
conclusion
Buying a car is an important decision. Laws exist to prevent dealer overreach, but both effective enforcement and consumer awareness are essential. Until buyers are aware of their rights, this pressure will continue.