Technical Gyan, a popular YouTuber with over 600,000 subscribers, recently faced unexpected challenges while attempting to collect a car he had purchased. What was anticipated to be a joyous occasion turned into a frustrating dispute regarding insurance. The dealership had quoted Rs 31,000 for an insurance policy, while he had already procured one online for approximately Rs 12,500, which included additional features such as engine protection and coverage for flood loss and key loss.

Despite having informed the dealership of his prior insurance purchase, the showroom insisted that he use its insurance policy before he could take delivery of the vehicle. This resulted in hours of waiting, with his family growing increasingly uncomfortable and frustrated. Eventually, a compromise was reached, where the showroom reduced its insurance cost to around Rs 22,000-23,000, allowing for the delivery of the car later that night.

Common Issues Faced by Other Buyers

Technical Gyan’s experience does not appear to be unique, as various other customers have reported facing similar challenges. One buyer on social media recounted how he sought to compare insurance options and associated costs, only to be persistently urged to accept the dealership’s package. This raised the critical issue of whether buyers have the right to choose where to purchase their insurance.

Another individual shared their experience with a Hyundai Venue dealership in Visakhapatnam, where the showroom quoted Rs 53,000 for insurance, while an alternative policy with identical features was available for only Rs 25,000. After expressing his intention to use the more economical option, the dealer allegedly informed him that the car would not be delivered unless he accepted their terms, further complicating the delivery process.

These individual accounts illuminate a potential trend in automobile sales that may disadvantage consumers. However, experts in law and insurance have asserted that dealerships cannot legally condition the sale of a vehicle on the purchase of their insurance policies.

Legal Perspective on Insurance Requirements

Shilpa Arora, Chief Operating Officer at Insurance Samadhan, highlights that dealers are prohibited from enforcing the purchase of insurance through their outlets as a prerequisite for vehicle delivery. While it is indeed a legal requirement for vehicles to be insured before they can be driven, Arora notes that customers retain the right to select their preferred insurance provider.

She elaborates that only third-party liability coverage is obligatory for new vehicles, which means buyers can opt for alternatives offering similar or superior coverage levels. While the impulse to comply with the dealership’s narrative may be strong, buyers should remember that they are not obligated to accept the dealership’s insurance policy.

Dheeraj Gupta, Advocate and Managing Partner at Peritia Law Chambers, reinforces that any refusal to deliver a vehicle based on the buyer’s choice of insurance constitutes unfair trade practice. He advises consumers that they can seek recourse through consumer courts if they encounter such circumstances.

Steps for Buyers to Take if Refusal Occurs

In situations where a dealer refuses to hand over the vehicle, experts recommend securing a written record of the refusal. Arora advises that buyers should request documentation explicitly stating the dealership’s conditions for not delivering the vehicle. If a written statement is not forthcoming, buyers should follow up with formal emails summarising interactions.

Gupta emphasises maintaining thorough documentation, including receipts, records of payment, and insurance quotations. This compilation is vital for substantiating any claims should the matter escalate to a regulatory authority or consumer forum.

Furthermore, if a dealer claims that external insurance might complicate claims processes, customers should request clarification in writing. They should also research the terms and conditions of any alternative policies they consider, ensuring a fair comparison.

Long or Short, get news the way you like. No ads. No redirections. Download Newspin and Stay Alert, The CSR Journal Mobile app, for fast, crisp, clean updates!

App Store –  https://apps.apple.com/in/app/newspin/id6746449540 

Google Play Store – https://play.google.com/store/apps/details?id=com.inventifweb.newspin&pcampaignid=web_share