Local Auto Dealerships Collect Unlawful Premium For “Faster Delivery” of Cars: Report

If you have recently purchased a new car or have visited a local dealership to inquire about model availability, you may know about the ‘common’ yet anti-consumer practice here.

Typically when you reserve a car for purchase, you put a down payment for it. You can then receive the car 3-4 months later and pay the remaining amount at that time. This is all well and good so far.

But here’s what is wrong when it comes to how Pakistani car dealerships are fleecing customers.

Pay More, Get Your Car Early

Paying around 150,000 rupees extra will get you the car right then and there, you can drive it home. Which is an anti-consumer practice to say the least.

What they are not allowed to do is ask for a premium to get the car delivered early. When you think about it, this should not be possible if we go with their original statement that says that due to increasing demand, manufacturing a car takes time.

A local newspaper mentioned that some Suzuki dealerships were forcing buyers for lump sum payment while some of the Toyota dealerships were asking for a down payment as high as 30% of the original cost.

Case in point

Nikkei, one of Asia’s premier financial news organization, recently did a report on Pakistani auto dealerships.

Their reporter Yuji Kuronuma visited a Toyota dealership in Lahore at Jail Road. When he asked if he could pay more for the down payment, the dealer replied that it wouldn’t change anything.

Changing his approach, Yuji then asked if there was a way to get the car delivered early, the dealer promptly replied that paying a premium of Rs. 150,000 to Rs. 180,000 would get him the car right then and there.

When asked about these practices, a spokesperson from Toyota denied any dealerships asking for premiums. While the spokesperson from Suzuki replied,

… such behavior was observed earlier at some of our dealerships, so we took the necessary measures, and as a result, our understanding is that no dealerships are doing that now.

Another Perspective

There may be another story going on behind the scenes. A high ranking bureaucrat says that large numbers of used Japanese cars of around 2-3 years age are exported to Pakistan on a regular basis. This lets the Japanese car makers sell more cars in their home market of Japan.

The local dealerships are trying to sell these used cars to the customers by saying they will be delivered to them faster than the new ones, according to the bureaucrat. When asked about this, both Suzuki and Toyota spokespersons denied existence of such practices.

via Nikkei

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