DON'T BE A VICTIM - GUIDELINES ON MAKING PAYMENT FOR YOUR PARALLEL IMPORTED CAR
Every once in a while, you would have stumbled upon breaking news articles that contribute to the already bad reputation of the PI (Parallel Import) car sector. Being a PI car dealer ourselves, we are often astonished by the amount of money people pay upfront to their PI car dealers without even considering the risks involved. Imagine paying up for everything when your car is not even in Singapore or when your COE is not even secured. It seems ridiculous but somehow there is always someone out there who falls prey to such PI car dealers.
So How Should You Pay Your Car Dealer?
There are no fixed rules or "industry norms" when it comes to paying your parallel import car dealer. Based on our perception of a safe buy and fair deal, we are able to suggest some guidelines for potential car buyers. This will help you to minimize your monetary loss and risk.
Insist on a low initial deposit of $5,000 or 20% of the OMV of the vehicle you are purchasing when you first sign on the dotted line. The reason is simple, your dealer typically pays 20% deposit to their supplier when they order their cars so this amount is fair to you and the parallel import car dealer.
Insist on a "COE Deposit" rather than the full payment for the COE.
At Venture Cars, we request that our customers pay a COE deposit of $10,700 (Inclusive of GST) on the first day of the bidding period. We do not require our customers to pay for the full COE price upfront. The remainder of the COE would be paid together with the balance payment. Again, there is no need to pay in advance because your PI usually bids on the third day of the bidding period.
If your car dealer tells you that your COE has been successfully secured, do a spot check at the LTA COE Open Bidding website as soon as possible. Simply, key in your NRIC number at the web link provided and your COE information will be made available to you. It is crucial that you put in the effort to check.
*Take note that the link provided is only available from the start of the COE bidding exercise on Monday, 12 noon to Friday 6 pm on the very same week.
Pay your balance payment only when these conditions are met:
- Your car is VAC ready and can be registered after you have made your balance/ downpayment. This can be done by asking for a copy of the "Letter of Approval" from LTA.
In this letter, you should see the Make & Model, Engine & Chassis Number and the Approval Code which consist of 12 numbers and an alphabet (201608xxxxxxP) and of course, most importantly your PI’s name on it. Do not pay up if your PI car dealer is unable to fulfill this requirement.
- Insist on the physical presence of your car in their showroom before you make your balance payment. It doesn't matter if the car is dirty or if your car accessories are not hooked up to your car. After you made your balance payment, your car should be registered. However, that doesn't mean that you can get your car in immediately after they receive the balance payment. Your PI car dealer might need some time to fix up your leather seats, radio and solar films, etc but all these should not interfere with the registration.
Once the car is registered under your name, the title is yours. You can confirm the registration of your vehicle by asking for a copy of the “Acknowledgement” or “Confirmation” printout from your PI car dealer. These printouts can be easily obtained after your PI process the online registration.
In the event that you are denied this information, visit One Motoring site and log in with your Singpass, you should be able to see your vehicle number listed under “My Assets”.
If you are still not sure, please write to us. REMEMBER that you only pay the balance payment when your car is ready for registration.
1. Trade-In Cars
As far as possible, we encourage you to trade in your existing car with the car dealer that you are buying your new car from. Firstly, It will minimize your payment load and secondly, you are able to drive the car until you receive your new ride. In the event that your PI car dealer fails you, you still have your old wheels. It would not be the case if you have sold your car to another car dealer and use the money to pay for your new purchase. You would have lost your money and your car.
2. Go For One Bid Guaranteed COE Packages
There are many different COE packages ranging from 1- 8 bids. You will see fancy terms such as “guaranteed" and "non-guaranteed”, “top-up" and "without top-up” packages. These terms are confusing but not without logic, these different packages are created to cater to the needs of the customer and the market sentiments.
In order to minimize your purchase risk, it is recommended that you minimize your waiting time for your car by purchasing a 1 bid guaranteed COE package. The longer you wait for your car, the more uncertainties you are going to expose yourself to. Typically, COE bidding takes place every 2 weeks. A 2 bid package would require the customer to wait for a month for their car. The lesser bids you purchase the shorter the waiting time.
With that, some buyers still prefer a longer wait time as the COE packages are usually cheaper. At the end of the day, it really depends on your risk appetite and how comfortable you are with your PI car dealer. There is no right and wrong here, but if you weigh the risks that you are going to take when opting for a higher bid package, the risk does not equate to the small amount of money that you are going to save. Unfortunate events can unfold over a long period of time.
3. Open Cat COE
Do request for an immediate transfer to an Open Cat COE if your PI car dealer promised you one (which he is entitled to) when your one bid is unsuccessful. Once the COE is under your name, your COE deposit is safe. We see this as a good form of damage control in unfortunate events. As long as you have the COE under your name, the COE is yours and even if your PI car dealer falls into financial difficulties months down the road, you can use the COE to look for another car.
4. Buy VAC Ready Stocks
One of the best ways to reduce your risk is to buy VAC ready stock cars. It may cost you $1-2K more but it is definitely worth it as you can get your car earlier and you will have peace of mind.
Like we have mentioned before, a VAC ready stock car means that the vehicle has gone through all necessary LTA inspections and paperwork. These cars can go for immediate registration once your COE is secured.
5. Online Registration Of Vehicle Takes Only Minutes
Some of you might not know but the online registration of a vehicle can be performed in a few minutes and a few clicks. So be cautious when your PI car dealer tells you otherwise, something might have gone wrong.
6. “Too Good To Be True” Prices
In the most recent case of PI running into financial difficulties, one of the affected customers paid $97,888 for a Toyota Voxy. We are not sure if it is an off-peak car (OPC) that he is buying but if it is not then it is very difficult to understand how he managed to get such a good deal.
If you refer to the prices listed in sgCarMart, the recommended retail price ranges from $123-137K, so how can a PI car dealer sell you a Voxy at such low prices? Think about it, if the PI car dealer is selling his cars at rock bottom prices then what would be the direction of his or her business? His business model is not sustainable and it is a huge red flag.
Always be extra careful when you see such advertisements, do your market research before committing to a car purchase. We recommend that you be smart customers and follow the retail price recommended by sgCarMart. sgCarMart is a fair and unbiased platform for all car buyers.
When the prices are too good to be true, it most likely is not.
7. Buy From An Established And Reputable PI Car Dealer
This is, of course, a no-brainer. The drawback is that a more established parallel import car dealer will usually price their car slightly higher than the others. When purchasing from an established and reputable PI, price is not everything. The value that you are getting in terms of after-sales service and support is what you should be going after. An established and reputable PI commands a premium because they are realistic in their promises and after-sales services.
Buying from a Case-Trust accredited company is also a good way to minimize your risk and will also help you in the event of any dispute. Venture Cars is Case-Trust accredited and you can look for us in this listing.
Of course, there is no 100% guarantee that you will not face issues when buying from a more established parallel import car company but if the price difference is not too much or similar to other parallel import car dealers then your choice should be quite clear.
Venture Cars hope that this article will be of some help to potential car buyers and we look forward to inputs and suggestions from all. Please feel free to contact us for more information.