5 Common Mistakes When Buying A Parallel Imported Car In Singapore

Oneshift Editorial Team
12 Sep 2018
 

(Previously written on 30 November 2015 by Vince Wong)

Previously, you learnt 5 Facts About Overtrading Your Car In Singapore and 5 Insider’s Perspectives regarding selling your cars to used-car dealers in Singapore. Even though it may not be as popular as the other methods of purchasing a car, there are still many who are drawn to the low prices of parallel imported cars (imported cars that have not been appointed by the car manufacturer). If you are one of those looking for one of these cars, here are some common mistakes you should avoid when buying a parallel imported car in Singapore.

Or rather, Steven Lim will be talking about it.

Steven Lim is a car broker by profession. His job, which is to link up buyers and sellers of cars, lets him transact many more cars a month than I ever can in 10 years, giving him the experience needed to get you a good deal.

With many of us on the hunt for a new car, especially when COE is lower, here’s what he said are our most common pitfalls when buying cars from parallel importers (PI). 

1.         We fail to check out the PI’s background.

Said Steven, “When buying a parallel imported car, people tend to make a lot of price comparisons. They say “Wah, PI A this model, they quote this price, they got this this this and this. PI B quote higher, but they got more things.”

“So they focus on dollars and cents, and what kind of freebies they are getting.”

“But they forgot about the background of the PI.”

In the worst case scenario, you may turn out to be a victim of a scam. In 2014, more than 100 victims were out of pocket to the tune of over $3 million in deposits paid to parallel importer Volks Auto Pte Ltd, for cars that never materialised. Also believed to be the largest cheating case in the automotive industry, the owner Koh Chek Seng was jailed in 2017 for 10 years for cheating, which involved about $6.1 million.

More recently in 2018, Apex Car and Novelty Auto were two of such parallel importers that closed without notice. Many prospective car owners were left in the lurch after paying huge sums of deposits to these companies. 

Besides doing the usual google search to check if there are any reviews about the parallel importer, consumers can head to the Accounting and Corporate Regulatory Authority (ACRA) to search about the financial status of a company. The few dollars may be a deterrence but hey, what's those few dollars in exchange for your potential loss of hefty down payments! 

2.         We get distracted by a very low price

Steven warned, “A lot of buyers ended up with a cheaper price but didn’t manage to get their car. This sort of story is very common. You must ask yourself, a car from Japan – how much difference on price can a dealer give? Can there be a 10k difference? How can there be that much difference? I mean nobody is going to tell you, “Ya ya I’m selling at this price, but you are not going to get your car.””

“It’s fair for people to look at the pricing – but I’m just trying to say, don’t always focus on that and lose sight of something else. Because cars come in from Japan, as in the PI case, the cost of dealer A’s car, versus dealer Z, cannot be too drastically different.”

“So there is no reason for a dealer to offer you 10 to 20k cheaper than the other one. It cannot be too different.”

And the reason is because of the way the parallel import business works. 

“There are only a handful of people actually importing the car on their own. So they probably negotiated with Japan and brought in 100 units. Then they gave them out to 10 to 20 dealers, with a margin. These dealers are getting the cars at a slightly higher cost than the importers. And as a matter of fact, while there may be say, 200 PI selling the same car, there may be only less than 10 actual importers.”

“If that is the case, how can the prices be so different?”


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