The ‘own-money’ culture is becoming a serious problem for car buyers in Pakistan as dealers have increased the rate of premiums on the prices of vehicles significantly. Car dealerships are reportedly charging own-money rates of up to Rs. 1 million above the Manufacturer’s Suggested Retail Price (MSRP) of vehicles.
Own-money is an illegal premium that car dealers charge customers over a vehicle’s MSRP for its early delivery or if they want to buy it on the spot.
The recent increase in the length of delivery periods due to global supply chain issues such as the shortage of the semiconductor microchip, a scarcity of containers and port staff, and the dearth of raw materials are facilitating the own-money culture as dealers charge customers huge amounts of illegal premiums on the MSRPs of vehicles.
A car dealer by the name of Anjum Rizvi told Samaa News that own-money on crossover SUVs like the Kia Sportage, the Hyundai Tucson, the DFSK Glory 580, and the MG-HS ranges up to Rs. 700,000. He added that the amount of own-money has recently decreased on the MG HS that was being sold at a premium of Rs. 1 million a few days ago.
The report claims that several carmaker-sponsored dealerships offer early deliveries of vehicles to customers in return for own-money from them, but all the automakers have denied any involvement of this culture in their dealership networks.
As per the report, the following are the rates of own-money against some the popular vehicles:
| Vehicles | MSRP (PKR) | Own-Money (PKR) |
| Suzuki Alto | 1,113,000-1,521,000 | 100,000-125,000 |
| Suzuki Cultus | 1,655,000-1,975,000 | 200,000 |
| Changan Alsvin | 2,149,000-2,589,000 | 150,000 |
| Toyota Yaris | 2,409,000-2,899,000 | 75,000 |
| Hyundai Elantra | 3,899,000 | 150,000 |
| Honda City | 2,599,000-3,174,000 | 300,000 |
| Toyota Fortuner | 7,649,000-9,269,000 | 1,000,000 |
Why Does the Issue Prevail?
The rising demand for vehicles is a double-edged sword now as it encourages car dealerships to charge illegal premiums from customers who want instant delivery of their vehicles.
On the other hand, the automakers are blaming the ongoing supply chain issue for the delayed deliveries. However, there are several brand-new vehicles in the market that are being sold at exorbitant premium rates.
The root cause of the problem is believed to be the lack of transparency and active law enforcement by the concerned authorities. The government had announced several times that it will work on curbing the ‘own money’ culture but it has made no significant progress on it so far, thus allowing dealerships to continue their practice of illegal profiteering.
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