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5 Things to watch out for when shopping a car from a parallel importer

Posted by Divine Chef on

courtesy WSJ public resource image.     Buy Honda Vezel Hybrid Motorland Singapore

My girlfriend, Xuan who has been shopping for a car recently has been complaining non-stop about how parallel importers (PI) market their cars. After three weeks of shopping and visits to several PIs, she decided to stick back to the original one she visited first. Okay. If she went back to the first PI, what's the point of wasting time to shop around? She wanted to play safe and make some comparisons before making the decision. Honestly the same happened to me as well when I was shopping for my car. It is fair to point out that not all PIs are bad but its my opinion that it's the trick of the trade to "confuse" the shopper.

Firstly, what are Parallel Importers? 

Parallel importers or PIs, are the dealers who import car makes that are usually not sold locally by branded car agents. Sometimes it’s because certain car models are domestic only, so international car distributors do not get to sell these outside of car maker’s home market and thus, these dealers see opportunity to import and sell these models. Prominent examples are Honda Vezel, Harrier, Toyota Sienta to name a few.

However, in recent times, there have been some bad cases of rogue parallel importers giving the entire trade a bad name.

I have spoken to a few people who purchased their cars from PIs. Not all have bad experience but generally everyone agrees that there are some things that car shoppers should watch out for:-

1) Where’s the car ?

You called and the dealer told you they have cars for test driving. They also said they have existing stock and many colours to choose. You took time to go to the showroom and found out there is no car for test drive (reason: the boss drove it out...hmmm really?); and the supposed stock cars are still at the port (huh? Then I come to your showroom to look at air?). These should sound alarm bells.

 

2) Package deal?

Packages are designed to confuse and give you the impression of a good deal with many fixed and/or variable components. Package A has 5 items and cost $XX. Package B has 7 items and cost $XX. Do you really need all the items in the package? Will any of these component cause a delay? Are you getting the best of each component or some mediocre ones bundled? I guarantee studying bundles may give you a migraine like it did to Xuan and me.  

 

3) Everything included… really ah?

We find shopping for a car from a PI can be a very confusing experience. Ask more questions and you will usually find out that your car comes with a tiny weeny display, no hands-free to connect to your phone, buttons in the car do not do anything when pressed. Part of the reason is because most cars are imported vanilla (meaning they come with nothing pre-installed to cut cost). Then, different PI may fit out the cars differently. Most times, standard offering means lowest cost accessories will be bundled. That means you will most likely get a dumb audio system that has no connectivity to your phone if you are not careful. Ask for hands-free, you will likely get the reply, “Can. But you need to top up $xxx” and bluetooth and $xxx for microphone". Ask for a larger display, you will be asked again to top up. It saves a lot of time and effort to get really connected system because tearing things apart later may void your warranty or cause more dis-connectivity (will cost money to fix) if your car is in the wrong mechanic hands.

 

4) Price is too good (cheap) to be true

Here’s where it gets tricky. Damn it's a bloody good deal. But it could be a misleading ad to lure potential buyers into the showroom. Another possibility is, the car is an old stock missing some mid-life facelift update or feature upgrade. These updates may be too subtle for the novice shoppers to notice.

 

5) Guaranteed x COE Bids

Are the terms and conditions for the purchase clear? Can you legally back out and take back your deposit? Make sure everything you have negotiated for is listed in black and white within the sales agreement.

Unless the contract states consecutive COE bidding, the dealer can wait until COE are in their favour before bidding on your behalf? In their favour means, the package deal of car + COE allows the dealer to make money. This is the main reason why some people have to wait beyond the period stated in their sales agreement for their new car after they pay their deposit.

What about COE rebates and top ups – if there is a top up, would the price be similar to car + COE without any so called COE package?

This article shares our personal opinion and hopefully helps you make better purchase decision. It is not possible to cover all the pitfalls in buying as every transaction may be different. 

 

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