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Should You Trust a Parallel Importer?

The Parallel Importers (PIs) market has been booming. Despite the obvious risks, PIs are still the choice of many Singaporeans. The attraction is in the significantly cheaper prices these PIs offer. Secondly, PIs import unique models that aren’t available in Singapore. However, are these reasons worth the risks of getting cheated?

Over the years, a myriad of cases have surfaced. And they all feel eerily familiar. From deposits mysteriously vanishing to parallel importers closing down and even ignoring safety recalls. The uncertainties that come along with PIs has contributed to its bad reputation amongst consumers.

But we can’t paint the entire industry with the same brush. There are many reputable and trustworthy PIs in the market. You just have to do your due diligence, which means, research, research and more research. Even though there’s no surefire way to protect yourselves from being a victim of these scams, there are some things you can do and requests you can make to better protect yourself.

But first, let’s take a closer look at the different types of scams that have been taking place.

Left in the Dark

We’ve all heard of the story before. A friend, a friend’s friend, a colleague’s husband, whoever it may be, getting themselves into trouble – all because they failed to do their due diligence.

Late deliveries, cars with different specs or even not getting a car at all. These stories are well-known. Yet many still fall victim for these scams.

Photo Credit: TNP

Over the years, we’ve seen Apex Car, Novelty Auto and Royal Automotive shut up shop without notice. Their customers were left in the dark and without the cars they’ve paid the deposits for. Which amount to almost $1,000,000 in total.

“PARALLEL IMPORTERS VS AUTHORISED DEALERS”

But the title has to go to Volks Auto, involved in the largest case of fraud to hit the car industry. The company ran away with more than $6,000,000 from their customers.

Unfortunately, only one out of the three masterminds were caught. For his involvement in the case, Mr Koh Chek Seng was sentenced to 10 years in jail. Even though a degree of justice was served, the victims were still unable to recover their losses.

This type of scam is especially common in Singapore. Many of these PIs will over-promise and come up with excuses. But in reality, these PIs will make no effort to fulfil orders. The intention of fulfilling orders can be distinguished as either bidding for Certificates of Entitlement (COE) or applying for car importation.

Who’s Responsible?

Photo Credit: Harell & Harell

There’s no doubting that the industry has a notorious name. And adding to its notoriety is another scandal – ignored safety recalls. This is extremely worrying as your safety and the safety of your loved ones are in jeopardy, all because of the lack of responsibility.

Back when Uber was still available in Singapore, Lion City Rental was involved in such a scandal. The company had failed to act on the recall even though one of its cars had caught fire. To the customers, it was the irresponsibility of the after-sales team in how they dealt with the entire situation. Luckily, these accidents have not led to any serious injuries.

Generally, after-sales services provided by PIs are subpar, to say the least. Usually, there will be instances where warranty is suddenly revoked or replacements parts take forever to arrive and even terrible servicing standards.

Dealing with PIs

Photo Credit: Straits Times

From the schemes and scams car dealerships are known for, it seems almost impossible to protect yourself. Nevertheless, you should be doing all you can to ensure you’re not a victim. Even though we can’t guarantee 100% safety, here’s what you can do to keep safe.

1. Research

It’s the first step you should take when buying something, especially a big-ticket item. A simple Google search can go a long way when finding the right dealership. Apart from Google, you can check out forums and ask questions about dealers. A simple Facebook search of the reviews will help too!

2. Prepayment Schemes

With the lack of consumer protection regulations when buying from a PI, it’s essential for consumers to understand the potential risks. The worst-case scenario for a consumer is losing the hefty downpayment.

To better protect yourself, you can try to negotiate for the lowest possible deposit. There are also some companies that offer a low deposit amount, which is very helpful.

3. Ready Stock

PIs with ready stock means you’re ensured a shorter waiting time, and the dealers will not be able to delay your order.

4. Warranty

Authorised dealers will definitely provide a warranty for your new car. However, PIs don’t guarantee this service. And even if a warranty is provided, it’s usually done in-house, which is still risky for consumers as there’s a possibility that the PI will close down.

The ideal situation is for third-party workshops to provide these warranty or servicing packages.

5. Black and White

Whether you’re buying from authorised dealers, secondhand dealers or PIs, it’s essential you get everything in black and white. Whatever the PIs offered, make sure it’s in writing so that the terms are finalised as a contract. This will ensure the legality on the product you are purchasing.

Risks VS Price

Photo Credit: BusinessAdvice.co.uk

Purchasing a big-ticket item will involve more risks than usual, and it’s usually because of the amount of money involved. So, choosing the right dealer for your dream car is extremely important. Even more so in Singapore, with the exorbitant prices of cars.

This is not to say that all PIs are crooked con artists. But it’s important for you to educate yourselves of the risks involved. If you follow the guide we’ve provided, you should be able to steer away from the black sheep of the industry.

How about you? What are some tips you’d share if someone asks for your advice on parallel importers? Share them in the comments!

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