“I am leaving without taking the car.”
For Technical Gyan, a car-focused YouTuber with over 600,000 subscribers, those were hardly the words he had imagined saying on the day he went to pick up his new vehicle. The occasion was meant to be a special one for his family — he had completed the financing process, made the necessary arrangements and was ready to finally bring home a car he had wanted for a long time.
Instead, the day turned into a dispute over insurance.
Technical Gyan said the showroom had quoted nearly Rs 31,000 for insurance, while he had already purchased a policy online for about Rs 12,500. The policy included the add-ons he wanted, such as engine protection, flood cover and key-loss protection. He had paid for it before reaching the dealership and informed the showroom that he would not be purchasing its insurance.
According to him, however, the showroom insisted that he buy its insurance before the vehicle could be handed over.
The disagreement continued for hours. His wife was unwell, while their two children grew hungry, thirsty and frustrated as the family waited. What was supposed to be a memorable car-delivery day instead became one of arguments, delays and uncertainty.
Eventually, Technical Gyan left the showroom without the car.
“I am going back without taking the car,” he said.
The dispute was later resolved through a compromise. He said the showroom reduced its insurance quote to around Rs 22,000-23,000, and he agreed to pay the difference while an arrangement was made regarding the refund of the policy he had already purchased. The vehicle was ultimately delivered later that night.
The episode, however, raises a broader question for people buying a new car or two-wheeler: while having valid insurance is mandatory, does a customer have to purchase that insurance through the dealership?
Accounts from other buyers suggest similar disputes have occurred.
WHEN DEALERS WANT TO PICK THE INSURER
A buyer on X described a comparable experience, saying he wanted to independently compare insurance, accessories and other charges instead of accepting the showroom's package. According to him, the salesperson continued to push these products through the dealership.
For the customer, the issue was not whether insurance was required, but whether he could choose where to purchase it.
Another buyer on Reddit, who was purchasing a Hyundai Venue in Visakhapatnam, described a more contentious experience. He claimed the dealership quoted Rs 53,000 for insurance, while an outside policy with the same add-ons cost Rs 25,000.
“Showroom Quote: Rs 53,000. Outside Quote (Same Add-ons): Rs 25,000,” the buyer wrote.
He alleged that after informing the dealership he would arrange his own insurance, the salesperson and manager told him that the vehicle would not be delivered unless he purchased the showroom's policy. He also claimed they warned that getting cashless claims could become difficult if he opted for insurance elsewhere.
These are individual accounts and do not establish how widespread the practice is. However, similar complaints on social media raise an important consumer issue: if a customer has already obtained valid insurance from another insurer, can a dealership make purchasing its own policy a requirement for delivery?
Insurance and legal experts say it cannot.
INSURANCE IS REQUIRED, BUT THE INSURER IS YOUR CHOICE
Shilpa Arora, Co-founder and Chief Operating Officer of Insurance Samadhan, said dealerships cannot compel customers to purchase insurance through them as a condition for vehicle delivery.
“No, forcing a buyer to purchase insurance through the dealership as a condition for vehicle delivery is illegal and violates Insurance Regulatory and Development Authority of India (IRDAI) guidelines,” Arora said.
She explained that although valid insurance is necessary to legally register and drive a vehicle, customers are free to select their insurer.
This distinction is particularly important at the time of purchase. A customer may be told that “insurance is mandatory” and mistakenly understand that the policy being sold by the dealer is compulsory.
The two things are different.
Arora said third-party liability insurance is mandatory for a new vehicle, covering injury, death or damage caused to another person. Own-damage insurance, which protects the customer's vehicle, along with additional add-ons, is optional.
Therefore, if a buyer finds another policy with comparable or better coverage at a lower price, they can choose that policy, she said.
“Dealerships cannot lawfully force you to buy their in-house policy, nor can they make it a mandatory condition for taking delivery of your vehicle,” Arora said.
In simple terms, a buyer needs valid insurance but is not required to obtain it from the dealership.
WHAT IF THE DEALER REFUSES TO HAND OVER THE VEHICLE?
The situation becomes more serious when a dealership actually withholds delivery because the customer has chosen another insurer.
Technical Gyan said that was what happened in his case. Despite already paying for an outside insurance policy, he said he could not take delivery because the showroom wanted him to purchase its insurance.
The Reddit buyer described a similar experience, claiming that delivery was refused unless he accepted the dealership's insurance.
Dheeraj Gupta, Advocate and Managing Partner at Peritia Law Chambers, said a dealer cannot make its own insurance policy a condition of selling or delivering a vehicle.
“Firstly, any automobile seller cannot force a consumer to take insurance from them specifically,” Gupta said. “The law states that vehicle should be insured when it comes out of the showroom. It simply means that the vehicle should be insured when leaving the consumer to choose his own insurance provider.”
If a dealership refuses delivery after the customer has already paid because the buyer did not purchase its insurance, Gupta said the consumer can approach a consumer court.
According to him, refusing to sell or deliver a vehicle on this basis could amount to an unfair trade practice and may also raise concerns under competition law and the Consumer Protection Act.
For customers facing such a situation, however, the immediate challenge is knowing what steps to take.
DON'T JUST WALK AWAY — DOCUMENT EVERYTHING
A customer may be tempted to argue with the dealership, cancel the cheaper outside policy or simply agree to its insurance to get the vehicle delivered.
Experts instead recommend creating a clear record of the dispute.
Arora advises customers to ask the dealer to provide the refusal in writing and then send a formal email documenting the conversation.
“Dealers rarely provide written proof of this practice, so securing documentation is crucial,” she said.
If a salesperson says, “We will not deliver the car unless you buy our insurance,” the buyer should request that the condition be put in writing.
Even if the dealership refuses, the customer can send an email summarising the conversation and asking the dealer to confirm why delivery has been withheld.
The objective is to ensure that the dispute does not remain merely a verbal exchange.
Gupta said this documentary evidence can become important if the matter later reaches a regulator or consumer forum.
Customers should retain proof of payment for the vehicle, including receipts, bank-transfer records and loan-disbursement documents, as well as the booking form or agreement. They should also preserve the showroom's insurance quote and the alternative policy or quote obtained independently.
“Written or recorded communication, including emails, messages, or call recordings where the dealer links delivery to purchase of their insurance, would also be crucial,” Gupta said.
Any communication showing that insurance had already been arranged through another provider should also be preserved.
Essentially, the evidence should demonstrate three things: payment for the vehicle was made, valid insurance was arranged, and delivery was being withheld specifically because the customer chose a different insurer.
WHAT IF THE DEALER REFUSES TO PUT IT IN WRITING?
A dealership may avoid sending a written message explicitly stating that delivery is being denied because the customer selected another insurer. Even then, the buyer can create their own record.
Gupta recommends sending a formal email or letter describing what happened and requesting delivery.
The communication can mention the date of booking, the amount paid, when the outside insurance was purchased, the dealership's insurance quote and what the salesperson said about delivery.
The customer can then ask the dealership to confirm its position.
Even without a response, such an email creates a contemporaneous record of the dispute.
Gupta said this could later serve as evidence if the customer approaches a consumer commission or regulator.
WhatsApp messages, SMSes and other written exchanges should also be retained. If the dealership has sent anything connecting delivery to its insurance policy, customers should not delete it.
WHAT IF THE DEALER CLAIMS OUTSIDE INSURANCE WON'T WORK?
Another concern for buyers is being told that purchasing insurance elsewhere could create problems with future claims.
In the Reddit case, the buyer claimed the dealership warned that an outside policy could affect cashless claim facilities. For someone unfamiliar with motor insurance, such a warning can be enough to persuade them to purchase the more expensive dealership policy.
However, buyers should not rely solely on a salesperson's verbal claim.
They can ask the dealer to provide the alleged restriction in writing and independently check the insurer's network as well as the terms and conditions of the policy.
Arora said customers who find a cheaper policy offering comparable or superior coverage can choose it.
The comparison should nevertheless be made carefully. A lower premium does not automatically mean a better policy, since factors such as coverage, deductibles, insured declared value and add-ons can differ.
But the decision over which insurer to use remains with the customer, according to Arora.
WHERE CAN CUSTOMERS COMPLAIN?
If a dealership continues to refuse delivery or pressure the customer after the issue has been documented, escalation may be necessary.
Arora recommends first approaching the manufacturer's regional office. Customers facing pressure to purchase insurance or unwanted add-ons can subsequently register a complaint regarding unfair trade practices.
Gupta similarly advises customers to first escalate the matter to dealership management or the vehicle manufacturer.
If the issue is still not resolved, he said buyers can approach the National Consumer Helpline, IRDAI for insurance-related concerns or the Consumer Commission.
The National Consumer Helpline can be contacted on 1915 and offers a pre-litigation mechanism for resolving consumer grievances.
The key takeaway for buyers is that a dealership's refusal does not necessarily mean they have to accept its insurance to receive their vehicle.
Maintaining a strong documentary record can be crucial. Evidence showing that the vehicle was paid for, valid insurance had been arranged and delivery was withheld specifically because the customer selected another insurer can help establish the consumer's case.
