Car dealers fleecing customers with illegal charges, asserts SC

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Car dealers fleecing customers
Honorable Supreme Court of India has taken to task car dealers who have been levying illegal charges from customers without being authorized by the law. Most of the car dealers in Delhi charge thousands of rupees from car customers towards handling, loading-unloading and logistics in an unauthorised and illegal manner.

Taking a strong exception to these hypothetical charges, honorable Supreme Court bashed the Automobile Dealers Association, issuing them a notice. A bench headed by Justice DK Jain stated that the dealers are making these charges look like a government levy when they are not. “How can you charge them when you have not been authorised? Where are the rules in the Motor Vehicles Act that authorise you?” questioned the bench.

The proceedings took place during the hearing for a petition filed by C Rajaram, who had alleged that car dealers in Delhi were charging amounts upto Rs 25,000 per vehicle illegally. Apparently more than Rs 550 crore has been collected by dealers via such illegal charges since the year 1999.

Senior advocate Sandeep Sethi, who was defending the auto dealers, was also lambasted for putting forward illogical explanations for the extra charges. One of his arguments was that the dealers were charging for petrol to let the customers drive to a petrol station close by. The argument was ridiculed by the bench saying “Is a buyer expected to lift the car in his pocket to a petrol pump? He cannot tow it to a pump. You sell a product that runs on petrol so you cannot expect to deliver it without the fuel. Why cannot you deliver it at their homes?”

The bench further asserted that while the dealers can increase the price of the vehicles, they cannot charge under these heads.

Now, in the light of the latest ruling, we would like to ask our readers if they have been levied such charges upon buying a new car. We would also request those who are willing to buy a new car to make sure that the dealers don’t get away with levying such arbitrary charges to them. Do share with us your experiences, and help bring to light this rampant malpractice by car dealers.


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  • Rajiv says:

    Sir,

    I feel we can go to consumer court only when we become consumer ie. we buy vehicle after paying the handling charges and then claim a refund thru court. In this also there is a problem car dealers show that they have arranged car against our order only. They can easily prove this as they often ask for advance and always pretend that there is booking system or waiting time and the car is not available instantly. Once we book we agree to handling charges thru an informal agreement with them. They don’t give you any quote without mentioning Handling Charges.
    Sir your comments are valuable as i have also written a complaint to RTO/Delhi/Operations branch with the Specific quotation asking for handling charges, which i wish to follow with RTI on action taken on my complaint.

  • You can always haggle with the dealer and make him slash the handling charges.

  • Today I have taken quotation for a new car and dealer had quoted handling charges also.Is there any rule passed by the govt. that dealer cannot charge any fright or handling charges for new vehicle from customer.

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  • Check if its the same with other Honda dealers.