Ask Venture Series
Yes, you read the title right. We’re starting out an all-new Ask Venture series where we answer some of the burning questions when it comes to purchasing new cars from Parallel Importers (PI). We will reveal the juiciest and most unheard-of insights of the PI industry throughout the series to help you understand and mitigate the risk and avoid unnecessary arguments and stress when you purchase a car from a PI. So without further ado - we present to you the #AskVenture Series – the new automotive adventure…
In Episode 1, we will explain what there is to know about Parallel Importers?
PIs in Singapore acquire new vehicles directly from Japan and/or the United Kingdom’s domestic market and import them into Singapore. They handle the ordering of vehicles, shipment, customs clearance, LTA inspection and registration of the vehicles before drivers can legally drive the car on the roads. They also provide financing and insurance for your purchases and trade in of your current vehicle.
So, what are the main differences between Parallel Importers and Authorised Distributors?
Basically, both entities are in the business of selling new cars. The ADs get their cars from the manufacturers while the PIs get their cars from the overseas dealers and exporters, who in turn, get their cars from the manufacturers. The ADs can only sell the brand which they represent while the PIs can bring in any car that you like so long as it complies with LTA’s regulations. Essentially, both sides sell brand new cars (sometimes even of the same make and model) but the specifications and features may differ due to “domestic” and “export” models. Also, pricing would be another main difference between the two as PIs usually sell at a lower price due to lower cost and smaller margins.
Should I buy from a Parallel Importer or an Authorised Distributor?
The number one key reason why car buyers should choose PIs over ADs is PRICING. PIs, with lower overheads and zero royalties or franchise fees are able to sell their cars at a smaller profit margin. Besides pricing, PIs also offer better trade-in values as most of them are also used car dealers themselves and hence have more experience in dealing with used cars. In fact, most of the ADs rely on the used car dealers for their trade-ins and this sometimes results in a portion of your used car trade-in value being lost along the way.
PIs also partners with various financial institutions and banks for financing and insurance, hence offering you more flexibility and options when it comes to car financing solutions. On the other hand, ADs will usually only work with one or two partners for financing and insurance which in turn limits your options when it comes to those two services.
Due to the varied demographic of car buyers in Singapore, very often, ADs have limited customization options for their cars and they tend to bring in the most basic equipment trims to suit the palette of majority of car buyers and maximise their profit margins. As PIs have the flexibility of ordering the exact car with the equipment trim level you want, they can bring you one step closer to your dream car. In addition, features in cars that are unique to regions like Japan, UK, which are not available on the domestic units that ADs bring in locally, might be available in the parallel imported cars, adding on to that unique charm that PI cars have.
Lastly, the PIs (with its freedom to bring in varied cars) usually offer a wider variety and up-to-date cars. Take the new Honda Vezel for example - the AD’s equivalent of the Vezel, the Honda HR-V is yet to be seen on Singapore’s road yet while the Honda Vezel is already displayed and ready to be test-driven in most PI’s showroom.
With all the above-mentioned points, why would some car buyers still stick with buying from ADs? Well, that is mainly because of the horror stories over the years of PIs shutting down and buyers losing their deposits and not receiving their promised cars as a result. Of course these are rare incidents and most PIs are law-abiding entities that are honest and here to stay. In fact, there are some players in the PI landscape that have been around for more than 10 years and are very well received by car buyers.
Warranty and after sales services are also another major consideration for some car buyers. The lack of support when the car gets into an accident or when there is a malfunction with the car can cause inconvenience and anxiety to drivers. It is important, therefore, to make sure that your PI has their own in-house workshop and has direct contact overseas to easily source for your car’s parts.
If you read on, we will shed some light on how to go about identifying such trustworthy PIs that you should look out for when buying a new car.
Ultimately, the decision of whether to buy from a PI or AD boils down to trust and the monetary savings. Afterall, why pay more for the same car? The ideal situation will be to identify your choice of car and seek out a reputable and reliable PI that carries that exact same car in order to save good money. After all, cars in Singapore are very expensive and it makes every sense to try to save whenever possible. However, if you are looking for an exotic or a rare supercar, it will be better to buy from an AD because of the special tools required to service and maintain these cars. For popular car makes such as Honda and Toyota, it is absolutely fine to buy from PIs as these cars are easier to maintain and parts (original and OEM) are readily available.
What to look out for in a Parallel Importer Company?
CaseTrust Accredited Business
As quoted from CASE (Consumers Association of Singapore) - CaseTrust is the accreditation arm of the Consumers Association of Singapore (CASE), and is Singapore's de facto standard for companies who wish to demonstrate their commitment to fair trading and transparency to consumers. The benefits of purchasing from a CaseTrust Accredited business are as follows: Focus on Motoring Business:
To be CASETRUST accredited, a dealership must fulfill the criteria set and to abide by them in their business practices.
For more information regarding the CaseTrust Accredited Parallel Importers or any businesses, you may do a simple search here with the link we have provided: https://app.case.org.sg/casetrust.plx?rm=results
Although not 100% foolproof, it is always better to go for one which has been in the business for a decent amount of time. Out of all the PIs which folded within the last 10 years, none of them had been established for more than 8 years and most of them were set up less than 3 years ago. Of course, there will always be new PIs who are reliable and trustworthy so do not shun them completely. Consider your options carefully and do research to spot other tell-tale signs of gimmicks, scams and traps (especially PIs with ridiculous and unbelievable pricing). We will elaborate more on this in our next article, so do keep a lookout for them.
Servicing and Warranty
It is important to know who is going to be there for you after your car purchase. When the car is faulty or requires servicing, do you look for your own servicing company or do you go back to the dealer? We believe after-sales service is as important as the car purchase itself.
As such, always go for PIs that run their own in-house workshop instead of one who operates on a tie-up basis or outsourced arrangements. Liaising between the PI and their appointed or outsourced after sales service providers can be quite stressful, unproductive and in most cases - simply a waste of time.
The transferability of your car’s warranty is also a very important consideration as it directly affects the resale value of your car. Most ADs allow the transfer of warranty from one owner to another but not the PIs. At Venture Cars however, we are proud to state that our car’s warranty is transferable as long as they are being serviced and maintained at our workshop. #hinthint
Facebook and Google Reviews
Regardless of any big ticket purchases, it is a must to do sufficient research before committing. One of the methods also includes reading up Facebook or Google reviews of the place you are buying from. This would give you a rough idea on how the company works and whether they are doing well or not in servicing their customers. Updated and constant good reviews show that the business is active, doing well and buyers are satisfied with what they are getting.
That is all for now! We would not want to be too long-winded so being clear and informative is the way to go for all our #AskVenture articles. In the next episode, we will be talking about the different COE packages and how to navigate them to get the best deal for your car purchase. If you are looking to buy a car, be sure to read them before you sign on the dotted lines. Do keep a lookout for this space as we continue our #AskVenture series. Follow our Facebook and Instagram for future articles. Like and share our page with your relatives, friends and colleagues especially those who are in a hunt for their next car. We will see you next time!