Govt. to review terms and conditions between car dealers and buyers
The government is reviewing the terms and conditions between the many car dealerships and buyers.
Current terms and conditions favor dealers.
Although buyers sign a contractual agreement before purchase, it turns out that the terms of the contract favor car dealerships, especially when it comes to delays and cancellations.
When ordering a new vehicle from dealers, buyers must pay an advance of up to Nu 300,000. Sometimes it takes more than a year for the vehicle to arrive after making the advance payment. If the buyer wishes to cancel the order, he will have to pay cancellation fees.
During Question Time in the National Assembly yesterday, Mongar MP Karma Lhamo said it was not fair because buyers pay an advance and wait a long time.
She said buyers should be able to pay the tax to the government and have the vehicles brought in directly. “If not, the possibilities should be explored.”
She clarified that the government must otherwise ensure that the vehicles are delivered within three months of advance payment.
Responding to the question, Lyonpo Loknath Sharma said that the Office of Consumer Protection (OCP) has carried out a study.
OCP found that vehicle dealers have to pay an advance to the manufacturing company when placing orders and therefore dealers request advance payment from buyers.
Lyonpo said there are no regulations that say a buyer must order a vehicle through dealerships.
“Some buyers order vehicles directly from the company and pay the tax to the government before the pandemic,” Lyonpo said.
Lyonpo also said the reason for the delay, taking a year to arrive, could be due to the pandemic with fewer productions from the companies.
On the advance payment, Lyonpo said dealers should make full payment to manufacturing companies. However, buyers can cancel the order if it takes more than six months for the order to reach the country.
Lyonpo said the government was reviewing the contractual arrangement. “The deal will suit both parties.”
Lyonpo said the government was trying to remove the dealer monopoly.
OCP’s program manager, Jigme Dorji, said: “Apart from force majeure, which is beyond our control, there is no clause in the contractual agreement that makes the car dealer responsible for the payment of a penalty for delay even under normal conditions, or for customer to cancel with full refund of prepayment.
He said the terms and conditions would be reviewed to ensure they complied with the Consumer Protection Act 2012.
OCP will also carry out advocacy programs with car dealers on their duties and obligations as a supplier and with consumers on their responsibility, in particular to help understand the nuances of the terms and conditions before signing the contract.