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Buying a parallel import. Is it worth it, and why?

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Life is too short to drive a car you don’t like. That’s why some Singaporeans buy parallel imports. Wait, what? OK. Let’s start from scratch and explain what a parallel import is.

Then we’ll get to the biggest question when it comes to buying a car in Singapore – is it worth it?  And if so, why?

What is a parallel import?

A car distributorship sells new cars on behalf of manufacturers like Toyota.  A parallel importer buys cars and re-sells them at a profit. In short, they cut out the middleman. Parallel importers claim that Singaporeans can buy cars with better specifications, at more attractive prices. Sounds good right?

However… there are key differences between a parallel importer (re-seller) and a car distributer (authorized dealer). The clue is in that one word – authorized.

A word to the wise

If you are thinking about buying a parallel import – tread carefully. Singapore has an estimated 100 parallel importers. Of these businesses, 28 are CASETrust-accredited. CASE is the consumer watchdog in Singapore and is working hard with the Singapore Vehicle Traders Association (SVTA) to verify legitimate traders from possible cowboys.

Don’t get conned

"Do more research, and see how long the company has been in the market selling new cars, their track records, the amount of deliveries and the amount of complaints,” said Hup Long Automobile Pte Ltd Manager Sean Lim. “Also, buying from a PI, you have to be very careful on your agreements.” channelnewsasia, Oct 2015

Car distributer vs parallel importer - Pros and cons

When you are buying from an authorized dealer, the price of the car reflects all the overheads – the brand, the shiny showroom, the staff, the industry fees, marketing and so on. The argument goes that if you buy direct from a respected parallel importer you pay less for the car by cutting out a lot of these costs.

This argument definitely holds true for buying car insurance. Don’t pay for a middleman, don’t pay for things you don’t need, don’t pay for a company’s expensive CBD office space. Car and travel insurance are simple, this should be reflected in the price you pay.

It’s not quite as simple when you are purchasing a car. If you are choosing whether to buy a car through a distributer or parallel importer you need to factor in the following:

  1. Amount you will save after all fees are paid and the car is on the road
  2. Repair and warranty agreements
  3. Ease of getting replacement parts
  4. Wait time for the car’s availability
  5. Ability to test drive

Do the math, read car reviews and customer forums here in Singapore. Knowledge is always power.

For more expert tips on how to buy a car in Singapore, look out for more posts in this series.

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