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

A techie, Overwatch and Street Fighter enthusiast, and Editor at ProPakistani.

  • if i received car from any car dealer at my flat in gulshane hayat colony old faisalabad then car registration will be by pakistan Army .

  • Ya Allah in begharat hukmarano aur corrupt policy walo se hamay nijaat dila aur is gharreeb mulk ko rahe rast par lay aa aur logo par apna rehm o karam farma aur hamari zindagio ko asan farma, ameen.

    • I won’t spare a chance to criticize the government but in this case gov isn’t involved & think logically my friend who ever now wants to buy a new model car isn’t going to be cheap & if he wants like extra VIP treatment & want the car fast, so he will pay up extra to that investor (which won’t be infront as dealers have a backdoor dealing with them) who have booked the car 3-4 months back by paying the amount on it (so he also deserve to earn on his investment) its just simple maths.

  • Is it a crime to pay extra to get faster service? How is it anti-consumer? It is giving consumer who has money exactly what they want. Is consumer who does not pay extra being defrauded? They will get their car as promised, in 3-4 months. What is the big deal?

    • lol exactly & mainly i think the admin have bought his new car & haven’t got the idea of a thing called “OWN” in this automobile field, for Local manufacture car its been practicing from years, investor invest his money to book on early stage when its even announced & they are in contact with the dealers so when the new consumer steps in to buy the car either he have to book it for 3-4 month time or he can get the car early by paying the extra “OWN” which will go in the investor pocket + dealer commission and the consumer can get the car fast simple, the one who invested & waited deserve the profit on his initial investment.

      The wrong part is that, the more investors invest the more burden is on the company who manufacture the car so the time gap keeps increasing, thats the down part, but its a business you can’t stop investors to invest in it as they are kind of a consumer who is buying.

      • Just because the vast majority is doing it does not make it right. Toyota does not allow premiums for early delivery and the authorized dealers are violating their contracts. Instead of keeping vehicles in stock ahead of time in storage(like the rest of the world), they are charging extra money for early delivery. It is anti-consumer because it is going against the concept of first-come-first-serve.

    • The big deal is that Toyota has a bylaw according to which it is illegal for Toyota dealerships to charge premiums for early delivery. The franchise dealers are violating their contracts with Toyota. This is anti-consumer because thanks to the premiums, dealerships are avoiding keeping vehicles in stock so that they may be delivered quickly for everyone. Not just the one who pays early.

  • This is been practiced from many years, i used to do car business in 2004-2008 & it was even practiced that time all over Pakistan, to get your car early just pay extra hard cash & get it.

    Mainly at that time investors use to book the cars at early as possible & on rates which keeps fluctuating depend on the demand of that vehicle, they use to earn & the one’s who were interested in getting the cars fast was willing to pay that..

    the term used was “OWN” like in urdu “OWN kia chal raha hai” from 50k-200k(max) was there in that time.

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