[pranad]

We recently booked a Lexus ES300h in Hyderabad and after the initial exhilaration wore down and I was reviewing the quotation given by the dealer for the car I noticed a discrepancy of Rs. 50,000 in the total amount payable to Lexus. This hidden charge was cleverly masked in the road tax component of the quotation with a few abbreviations put up next to it. The road tax at 20% in Telangana should amount to Rs. 13,16,200/- however the total as shown below in the screenshot from the quotation given to me by Lexus Hyderabad is Rs. 13,66,200/-



When questioned about this the sales representative gave me the following break up:



There is still a further amount of Rs. 5,865/- which is unexplained in the above breakup. The PDI charges of 40,000 are wholly unjustified as per multiple consumer court orders, Supreme Court directions, a Delhi High court order and multiple circulars issued by RTO Telangana. However, dealers seem to think of themselves as above the law and charge these illegal fees without justification. When I took this issue up with the GM, Lexus Hyderabad he brazenly said this is company policy and there is nothing he can do to change it.

I then showed him the below circular issued by RTO Commissioner in 2016 explicitly forbidding such practises. The General Manager said this circular was withdrawn but could not come up with any documentary evidence to back his claims.





It seems like Lexus Hyderabad is simply out to cheat customers and make extra money through unfair trade practises and illegal charges. Please beware of this and ensure you do not pay anything over and above the statutory requirements. Dealers cannot steal our hard earned money and expect to get away with it.

I will be sure to escalate this to Lexus and Toyota corporate teams to ensure they act in this matter failing which I will consider legal action against the dealer and Lexus/Toyota. Will keep you guys posted on my progress.

[100Kmphormore]

That HPA component is a handling fee probably. Stand your ground and have the unnecessary charges removed and ask for documentation in writing/print to back up his claim. I am not going for the Ola S1 booking on the app because there’s a straight handling charge of 1800 odd. Anyone here who have bought the scooter on the app and got the charges removed?

[RJK]

Pls let us know the outcome of raising this with Toyota/Lexus. I thought the OEM had strict controls over the dealers, even in pricing Of the product, not keeping the faith.

Seems like Toyota is also succumbing to dealers cost pressures and letting them fleece the customer. There’s another thread by member amalji regarding his sub-par experience with a dealer in Bangalore for the service of his Innova Crysta.

I’ve been an ardent fan of Toyota for its process oriented approach and have bought two back to back products but not sure now if one can shut their eyes and trust Toyota. Vigilance, as always, will be the key.

Cheers

[GTO]

Man, dealers really take customers for a royal ride. I'd want to know just what they are doing for the PDI of a car from Lexus, a brand known for perfection in build quality. Regardless, one of the primary responsibilities of a dealer is to ensure a smooth delivery, PDI included. What next, 20000 rupee parking fees for your Lexus before you take delivery?

You please write to Lexus directly about this. I am also forwarding a link of this thread to someone I know at Lexus. Lexus is known to take exceptional care of its customers & will fix this.

[V.Narayan]

Originally Posted by pranad

We recently booked a Lexus ES300h in Hyderabad and after the initial exhilaration wore down and I was reviewing the quotation given by the dealer for the car I noticed a discrepancy of Rs. 50,000 in the total amount payable to Lexus. This hidden charge was cleverly masked in the road tax component of the quotation with a few abbreviations put up next to it.

@Pranad, Is there some way I can connect with you directly. As you are a newbie I cannot send you a private message with personal phone numbers of one or two senior officers in their system. The National Sales Manager I knew has changed jobs. His place seems to have been taken by the person whose Linked In profile is here https://www.linkedin.com/in/anshuman-maharana-1736a09a/ At least message him via Linked In. If you believe, as you do, that what the dealer has charged is illegal please get assertive you have nothing to lose. Personally I do not know what charges are legitimate or not in TS. I had paid a PDI in my purchase in 2017. I checked with the New Delhi dealer just now who confirmed that they charge Rs 90,000 for PDI etc and as far as they know it is legitimate. If you are convinced you have been short changed suggest you lodge a complaint on contact@lexusindia.co.in

[Turbanator]

Originally Posted by pranad

RTO circular issued asking dealers to refrain from such actions

Have you checked with other dealerships about what they are charging? Here in the North 90K is the norm with most luxury car makes. They give an invoice too.

I don’t know if RTO actually has any jurisdiction over the invoice charges, as dealers are asking you to pay for the PDI/ inward freight etc., and they are paying taxes too. RTO can at most calculate road tax by including such charges if they want.

Such taxes are very common overseas, but here we take them as illegal as we have a concept of MRP, which technically should include everything. I won’t fret over this if others too are doing similar. Now two wrongs don’t make a right, but I have come at peace with such charges for my own sake. If you are investing so much, enjoy the car. Think of some additional kind of tax. Already you are paying 20% RTO on full value, whereas we pay 8% on basic value (minus the GST) here in Chandigarh.

Here's what happened to another member, you can try showing them this judgment

https://www.team-bhp.com/forum/india...ml#post5362146 (Delhi Transport Dept tells Dealers to stop "Handling Charges" SCAM. EDIT: Telangana and Kerala too)

[pranad]

Originally Posted by RJK

Pls let us know the outcome of raising this with Toyota/Lexus. I thought the OEM had strict controls over the dealers, even in pricing Of the product, not keeping the faith.

My father purchased a Toyota Innova 2.4Z from Harsha Toyota in Feb 2021 (The same dealer also operates the Lexus showroom in Hyderabad) and upon reviewing the bills now I can clearly see a 20,000 Rupee Handling Fee charged there too. I will be escalating this to Toyota as well.

Originally Posted by GTO

Man, dealers really take customers for a royal ride. I'd want to know just what they are doing for the PDI of a car from Lexus, a brand known for perfection in build quality. R

Thanks GTO! I really appreciate your help in this regard. After having read through another owner's experience dealing with the C-Suite at Lexus I am confident they will sort this out in no time.

Originally Posted by Turbanator

Have you checked with other dealerships about what they are charging? Here in the North 90K is the norm with most luxury car makes.

As a consumer I am simply expecting to be served within the legal guidelines that exist in place. When there are multiple consumer court rulings declaring such charges to be illegal I take issue with dealers acting brazenly to go ahead and do it anyway.

I do not think the RTO has any authority over it too but the circular was issued to reiterate Delhi High Court and Supreme Court orders and not issue any new orders.

A lawyer friend of mine also informed me that the Motor Vehicles Act prevents dealers from charging anything beyond the Ex-Showroom Price and any charges over and above that should be optional (Excluding Insurance which has to be taken from either the dealer or a third party insurance provider, however the dealer cannot compel you to take insurance from them)

Lastly, when we purchased an Innova from the same dealer last year they charged a 20,000 rupee handling fee but only gave us a debit note for the same and not a GST invoice which clearly shows that they are not paying taxes on this amount as they cannot legally show these charges on their books.

Originally Posted by V.Narayan

@Pranad, Is there some way I can connect with you directly.

Dear Mr. Narayan, thank you for writing to me here as well. Can you kindly email the contact details of the concerned officers to pravishta.n97@gmail.com.

I will also reach out to Lexus through the above-mentioned email address

Mod Note - Please use multi-quote and quote only relevant parts while replying.

[RJK]

Originally Posted by pranad

My father purchased a Toyota Innova 2.4Z from Harsha Toyota in Feb 2021 (The same dealer also operates the Lexus showroom in Hyderabad) and upon reviewing the bills now I can clearly see a 20,000 Rupee Handling Fee charged there too. I will be escalating this to Toyota as well.

Now that you mention, I'll have a re-look at the tax invoice of our Camry purchase last year. I don't recall seeing a line for handling charges separately or maybe they might have waived it off as we billed in end of Dec'20 & registered in Jan'21. So I had managed to get some discount from them, even though the car was made-to-order only

Cheers

[pranad]

Originally Posted by RJK

Now that you mention, I'll have a re-look at the tax invoice of our Camry purchase last year. I don't recall seeing a line for handling charges separately or maybe they might have waived it off as we billed in end of Dec'20 & registered in Jan'21. So I had managed to get some discount from them, even though the car was made-to-order only

Cheers

See if the computation for the Road Tax adds up correctly, in my case there was a clear 50,000 difference between the actual State Road Tax and the amount quoted by the dealer which is how we caught it. Discounts should also be offered on the ex-showroom value of the vehicle itself and not on any extras

[Hayek]

No point making a fuss about these things. Auto dealers are in any case not a very profitable business. If you are ok with the overall price you are paying (including discounts if any), buy the car - irrespective of what head the dealer charges his margin under. If you are not ok, buy something else. But getting ornery about the dealer charging for something for which he is issuing a receipt does not make sense in my view. You don’t want to start a relationship with a dealer (who will have to service your car over 5+ years and will have discretion on various things) with a fight on less than 1% of the value of your car.

[libranof1987]

Originally Posted by Hayek

But getting ornery about the dealer charging for something for which he is issuing a receipt does not make sense in my view. You don’t want to start a relationship with a dealer (who will have to service your car over 5+ years and will have discretion on various things) with a fight on less than 1% of the value of your car.

Disagree. The/any dealer is not a charity that has to depend or resort to charging beyond the stated price and taxes to make a sale. They are in the business of selling cars and being a dealer implies that they are suitably compensated by the manufacturer.

Customers shouldn't have to pay for the dealer to be able to conduct business.

Justifying by stating this cost is minuscule compared to the overall cost of the car or that you are building a long-term relationship with this dealer is just not the right premise to agree to this cost. Further, that they are giving a receipt for it is inconsequential - it literally doesn't mean / change anything about that amount. By your logic, where does / should this stop?

This reminds me of how, several years ago, shops charged a rupee or two extra if you wanted your cold drink cold - the convenience charge for cooling your Rs. 7 bottle of Mountain Dew!

[mango_pal]

Originally Posted by Hayek

No point making a fuss about these things. Auto dealers are in any case not a very profitable business. If you are ok with the overall price you are paying (including discounts if any), buy the car - irrespective of what head the dealer charges his margin under. If you are not ok, buy something else. But getting ornery about the dealer charging for something for which he is issuing a receipt does not make sense in my view. You don’t want to start a relationship with a dealer (who will have to service your car over 5+ years and will have discretion on various things) with a fight on less than 1% of the value of your car.

Sorry, but i disagree with this for the following reasons:
1. The sales team and the service team are separate. The relationship point is moot. Unless Lexus has a relationship manager system where it's 1 point of contact from sales to service.

2. It's a matter of ethic. For eg: I'm more than happy paying a good petrol pump attendant Rs. 50 for filling up my tank for Rs. 5000, but if they try to defraud me by Rs. 50, i will be pissed and will lose my trust in them. The amount is immaterial.

I respect car dealers who are transparent about their handling charges. Such an under-handed way of hiding it within registration charges is pure deceitful; and if not for the excellent observation by the OP, it would never have been found.

How can one establish trust in a dealership if they are intentionally being deceitful? Where does the deceit end? What's to stop the dealer from swapping out OEM components and making a quick buck before delivery?

My recommendation to the OP is: doing business with the people who represent the brand is critical. If you don't trust them, don't do business with them, and take your business elsewhere.

Best course of action: if Lexus steps in and takes the necessary action against the dealer ensuring 100% transparency.

[veedub89]

As I am sure the OP will agree with me, this case is not of the actual money being involved rather, it is more to do with the unfair practice of charging for something that the dealer is supposed to do any way.

The PDI formalities form a part of the delivery process that the dealer must execute before handing over the car to the customer.

While, I am not from the automobile dealership background, my company deals with the trading of industrial equipment and we perform a similar task to what is being referred to as the PDI here.

At the end of the day, the PDI is just a basic check of the car/equipment to ensure it hasn't been damaged during transit from the factory to the dealer. The real PDI happens at the factory.

And if the dealer really is being proactive and offering something additional, this expense of 40k can be made optional and the dealer can then try to "sell" this as some genuine value addition on his part.

This lack of clarity and burying the cost with some other component of the sale reeks of suspicion.

[Hayek]

Originally Posted by mango_pal

I respect car dealers who are transparent about their handling charges. Such an under-handed way of hiding it within registration charges is pure deceitful; and if not for the excellent observation by the OP, it would never have been found.

But if you look at the quote posted by the OP, it says Registration Charges plus TR, PDI etc. Yes that could have been spelt out but it is certainly not underhand. The fact is that nothing happens at a dealership without OEMs being aware of it. They set their commissions knowing fully well that the dealer will make some money on such heads (and that some of these heads are needed to deal with costs the dealer incurs which the OEM would not be willing to bear).



Posting the pro forma invoice for my own Tiguan - there was ~₹51 k as service charges for registration and ₹ 20 k depot charges. Don’t see anything underhand - if you don’t check an invoice before spending lakhs of rupees, it is your fault. Fully agree that if you get a better deal elsewhere, go there.

[Sheel]

The job of a sales outlet is to sell me a vehicle, neither insurance nor any other kind of charges & whenever I have made a purchase or go with somone who is very close (max. maybe twice a year), I never had to haggle or put these up firmly. I agree, not everyone has the time or hand to look after RTO / Insurance & other bits, so there always is a price to pay. But, it should not be forced IMO.

And, all of this depends on manufacturers and how lenient or strignemt they are with their sales outlets. I am fine to pay the ex-showroom charges, registration charges (with a max difference of upto Rs. ~2,000) & insurance (post getting it tallied outside for similar coverage & will pay till ~5K max). For the rest, I won't, will either walk away or involve the manufacturer and see how it pans out. I hope Lexus will look into this as should VW (just the post above).