Wednesday, May 21, 2014

Points that need to be taken care of while dealing with Is it really EMI free?

Points that need to be taken care of while dealing with

The following may needs to be persued before someone take decision to buy car on Free EMI scheme on has come out with a scheme as the name suggest. The prima-facie it seems that the car can be purchased under EMI scheme however not to be paid. On the contrary when we look at their web-site the following conditions are laid which stresses the need to be taken care of:

I.                   Scheme
1.      The perspective buyer has to pay a booking amount or down payment of 25% of the cost of the vehicle.
2.      Rest of 75% amount is payable in 60 EMIs for which the perspective buyer has to pay for.
3.      The company has got panel of advertisers for display of the advertisements on both sides of the car which in terms of the coverage almost to 60-70% of the area of the car.
4.      While the customer is required to pay upfront for 60 months EMI, he would be reimbursed for 36 EMIs in monthly payment system. This implies that the customer is definitely required to pay 24 months EMIs. It also implies that the company is resorting to misleading the consumers giving a feeling to the consumer that no EMI would be required to be paid.
5.      To claim for the monthly reimbursement pay out, one has to drive a minimum of 1500 Kms. Per month. The month in which the vehicle has not travelled 1500 Kms., no amount would be reimbursed.

II.                The following points need to be taken care of while making a purchase decision:

1.      Whether the advertisement is allowed to be displayed on the both sides of the car, is not known. In my view the display of any advertisement could not be provided as it distracts the other road users. Supreme Court has already taken note of such distraction in the case where the big boards are installed on the sides of the road and highways. Even if it is allowed, what would be the responsibility of payment of fee and taxes to the respective states municipalities? What would be the situation when your vehicle is being driven on the roads of multi-states?
2.      I have sent an email at the email ids provided by the company on their web-site on 15th May 2014 seeking as to whether the permission from any of the authorized agency for display of advertisement on the sides of the car has been obtained or the customer is required to obtain the same. The company has not yet responded to the email which caution us to further take care for making any purchase decision. If the company cannot respond to the email prior to the purchase, one can imagine what would happen post-purchase. This is how someone has to judge the responsiveness of the service provider or the retailer or the companies.
3.      Surprisingly the contact details as provided by the company in their web-sites are the mobile numbers. The company has got 9 mobile numbers for the contact with the company and not even a single landline number is provided. It is generally seen that frauds are taking place where the details of contact numbers are mobile numbers as the same are available from telecom companies without any proper documentation and the same are switched off or changed when the customer faces problems.
4.      I have already submitted an application under RTI Act 2005 to Ministry of Transport & Highways to seek details as to whether any permission/authority issued for display of the advertisement on the car. I will update the blog as soon as I receive the information
5.      Since the scheme is not EMI free but by way of reimbursement of amount, the advertisement itself is misleading. Any perspective buyer would feel that the scheme would involve purchase of car on payment of some down payment and then no EMIs would be required to be paid. On the contrary the customer is required to pay compulsory for 24 EMIs.I am forwarding the post to Advertising Standard Council of India (ASCI) who are responsible to take care of misleading advertisements.
6.      The company is compelling the buyer to drive 1500 Kms. Per month. Is it not amounting to inducing or tempting the vehicle owner to drive unnecessary and waste country’ fuel which need to be conserved. This problem would be more prominent in small cities where the places of work/job are hardly 2-3 kms from residences.
7.      Looking at point No. 4 above, what would be the Income Tax and other tax liabilities as the reimbursement could be treated as your income.
8. To a question that "HOW MANY BOOKING HAVE ALREADY BEEN DONE?" the company states that "Bookings are open and we receive unlimited queries every day. So far we have received an overwhelming response and we are still counting. So to quote a number would be difficult but you can assume that it is creating quite a stir among the crowd." It is not understood why the company cannot give such figures and stating that "we are still counting" leads to suspicion.

Prevention is best cure then why not we take care before we make any purchase decision or transact any payment

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