Auto dealers want fitness-linked insurance

Federation of Automobile Dealers’ Associations (Fada), the apex national body of automobile dealers engaged in sale, service and spares of two and three wheelers, passenger cars, commercial vehicles (including buses and trucks), tractors etc in the country, is planning to take up the matter with insurance companies and also the Insurance Regulatory and Development Authority (Irda) for fitness-linked insurance premium for all categories of vehicles in the interest of clean environment and road safety.

It is worth noting that Fada has suggested to the Centre to introduce periodic inspection and certification of all passenger cars on the lines of system prevailing in the UK and other developed countries. In the UK, there are over 19,600 garages that are authorised by the Ministry of Transport (MOT) to carry out inspection and certification of passenger cars.

The current provisions of Motor Vehicles Act, India provides for annual testing of commercial vehicles for emission, road safety and worthiness by regional transport offices (RTOs). Speaking to Business Standard, Fada president S P Shah said, “The current fitness regime administered and operated by the government, which is largely manual and subjective, has failed to deliver the desired results.”

Shah added, “Since amendments in the Motor Vehicles Act/Central Motor Vehicle Rules providing for periodic inspection and certification of private passenger cars is likely to take time, we have been having dialogue with other stakeholders for introduction of fitness regime for all categories of vehicles without waiting for the changes in law. One insurance company, with which we had a dialogue, has agreed to offer financial incentive in insurance premium in case of passenger cars that are certified by the automobile dealers for fitness on safety parameters. We propose to take up the matter with other insurance companies and also Irda for fitness-linked insurance premium in the interest of clean environment and road safety. A team of Fada members also had a meeting with Society of Indian Automobile Manufacturers (Siam) to discuss the ways and means of introducing fitness regime for passenger cars. It was suggested that automobile manufacturers and dealers should work together to give shape to the fitness regime. Fada intends to continue the discussion to make it a reality.”

He added further, “We also proposed to the Union Minister Kamal Nath for the inclusion of Fada representatives in the committee constituted by the Union Ministry of Road Transport & Highways for reviewing and suggesting changes necessary in the Motor Vehicles Act and Central Motor Vehicle Rules in tune with the current and emerging needs.”

In the near future, Fada would be working with National Automobile Dealers’ Association (Nada) for the introduction of Dealer Protection Law in India and in making Automotive Dealership Excellence Award (ADEA) an annual feature. Fada is also pitching for introduction of Vehicle Scrappage Incentive Scheme. The Scrappage Incentive Programme doling out cash incentive ranging from $2,000 to $4,500 for the people trading in their old vehicles for the new ones has been a huge success and helped boost vehicle demand in the US and Europe.