The CCI (Competition Commission of India) has said that insurance is not mandatory at the dealership when buying a new car or bike as it is against the spirit of free competition.
The Competition Commission of India (CCI) was established by Parliament under the Competition Act 2022 to ensure that competition is not adversely affected. In addition, it promotes and sustains competition in the market and protects the interests of consumers. CCI will also ensure freedom of trade conducted by other participants in the local market.
As part of its advocacy mandate, the Commission is obliged to take appropriate measures to create awareness about the subject of competition. In the last twelve years, CCI has received lawsuits in various sectors of the domestic economy, including the automotive sector. A common problem that often comes up is the alleged obstruction of insurance services by auto dealerships when buying a new car.
Customers have been persuaded to seek insurance services from selected companies and if they do not, the claims process will not be smooth for them and much more. The CCI said such activities may not be in line with the provisions of the Competition Act. For the sake of free competition, consumers should be allowed to avail the services of any insurance company to which he / she can add CCI.
Customers seeking services from insurance companies other than those recommended by dealers may find deviations in their annual pay (or perhaps with limited benefits) and the alleged connection between the policy maker and the automated dealership may be beneficial to them and not to the owners of a relatively new car.
The commission said that in order to prevent such work, consumers must be educated about the other options available at the time of purchase and be in a position to choose the policies of their choice. It further noted that SIAM, as the body representing the original equipment manufacturers, could play an important role in eliminating such information disparities.
CCI said that it is advisable that SIAM (Society of Indian Automobile Manufacturers) would influence its OEM members to report the matter to the representative dealership by showing it. “Consumers are free to get insurance services from any insurance service provider” In a clear and prominent part of their showroom premises.