There is no rule by the government or RTO that allow dealerships to extort extra amount from customers in the name of handling charges.
The Kerala Motor vehicle department recently raided major vehicle dealers across the state in a bid to catch dealerships extorting money from customers in the name of handling charges, MotorBeam reader Habeebu Rahman informs us. The raid called “Operation looting” saw action being taken against 71 dealers and was led by all RTOs in the state. The RTO department swung into action in a response to a complaint filed about illegally receiving handling charges during the purchase of a new vehicle. The department has also temporarily cancelled trade certificate of dealers found guilty.
As per estimates, around eight lakh new vehicles are registered in Kerala in a year, out of which around six lakh are two wheelers. The dealers are charging an average of Rs. 2000/- as handling charges from customers illegally and going by simple maths, the amount extorted turns out to be a hefty Rs. 120 crores per year. The numbers escalate further for four-wheelers as the complaints suggest that dealers are charging anywhere between Rs. 6000-1.5 lakhs as the supposed handling charges.
If you take Rs. 10,000/- on an average charged by dealers on each vehicle, the earning amounts to around Rs. 200 crores per year. That is certainly a hefty sum which goes unaccounted for and is a mere loot. Not to forget, this amount is charged against absolutely nothing. The dealers could also face criminal charges as a police complaint could be filed against them as indicated by the state transport commissioner.
In most cases, vehicle manufacturers provide expenses to dealerships for pre-delivery inspection, fuel among other bits in a bid to transfer cars from the stockyard to the dealership location. However, dealers have made an opportunity out of the same to fleece unsuspecting customers. The problem though isn’t just limited to Kerala, handling charges is a scam very much operational in other cities as well and can be very much denied by the customer. The Kerala RTO has concluded that if dealers are found guilty again, their trade certificate will be cancelled permanently.
Dealers found guilty in certain RTO circles –
* Palakkad – 13
* Trivandrum – 3
* Attingal – 2
* Kollam – 1
* Pathanam thitta – 2
* Alappuzha – 2
* Idukki – 6
* Eranakulam – 9
* Moovattupuzha – 3
* Trissur – 3
* Malappuram – 4
* Kozhikode – 4
* Vatakara – 3
* Wayanad – 3
* Kannur – 6
* Kasargod – 7
