Blog / Car Insurance
Buying a Parallel Import: Is It Worth It, and Why?
Life is too short to drive a car you don’t love. That’s why some Singaporeans turn to parallel imports—an alternative way to get the car you want at a more competitive price compared to authorised dealers.
In a nutshell parallel importing is the legal practice of importing non-counterfeit products from other countries and typically without the consent of the intellectual property owner.
But if it sounds too good to be true, buyers should exercise caution and understand both the benefits and risks involved before making a purchase.
What is a Parallel Import?
Firstly, an authorised distributorship sells new cars on behalf of manufacturers like Toyota, working directly with the factory to import and sell vehicles while offering a brand experience with warranties and after-sales support.
A parallel importer, however, buys the same models from overseas markets—often with different equipment levels or nameplates due to regional variations —and resells them in Singapore, usually at a lower price. They source cars through intermediaries, such as dealerships in Japan or the UK, while some buy directly from manufacturers' excess stock or auctions. Importers must obtain type-approval from the Land Transport Authority (LTA) before the vehicle can be legally registered in Singapore.
Authorised Dealer vs. Parallel Importers: Pros and Cons
When choosing between an authorised dealer and a parallel importer, here’s how they compare:
Authorised Dealers
Pros:
- Warranty & After-Sales Support: Manufacturer-backed warranty ensures peace of mind.
- Guaranteed Vehicle Specifications: Cars comply fully with local standards.
- Access to Recalls & Software Updates: Manufacturer updates available.
- Reliable Service & Authenticity: A car dealer provides reliable after-sales service and customer support as it has access to genuine spare parts, ensuring long-term vehicle performance.
Cons:
- Higher Prices: Overheads such as branding and showroom costs can increase car prices.
- Limited Model Selection: Only certain models are officially available.
Parallel Importers
Pros:
- Lower Prices: Reduced costs make PIs a more budget-friendly option. This is because parallel importers do not have to pay all the overheads, industry fees, and other costs associated with being an authorised dealer. As a result, they can pass the savings on to consumers, making parallel import cars generally a more affordable option.
- More Model Choices: PIs can offer models that authorised dealers don’t import.
- Faster Availability: Parallel importers often have stock ready for immediate purchase, making it easier for buyers who need a car quickly.
- Increased Market Competition: The presence of parallel importers forces authorised dealers to offer more competitive pricing and service packages, benefiting consumers.
Cons:
- Limited Warranty & Support: Warranty is importer-backed, not manufacturer-backed. Therefore, parallel importers may not have the same level of support and warranty as authorised dealers, and consumers may need to be more cautious when purchasing a parallel import car.
- Regulatory Compliance Issues: Some PI cars need additional modifications to meet local regulations.
- Resale Value Considerations: Some PI cars depreciate faster due to limited manufacturer support and buyer preference for authorised dealer models. However, popular PI models like the Toyota Sienta and Honda Vezel may retain value well.
Parallel Importers and COE Costs
- Some parallel importers bundle COE into their car prices, while others require buyers to bid separately.
- Authorised dealers often have more stable pricing structures as they purchase COEs in bulk or absorb short-term price fluctuations.
- Always clarify whether the quoted price includes or excludes COE before purchasing.
Tip: If bidding for COE separately, be aware that COE prices fluctuate monthly, and any delays may impact the final price.
Loan and Financing for Parallel Imports
- Some banks finance PI cars, but others may not, or they may charge higher interest rates. Loan approval depends on factors such as the car model, dealer reputation, and the buyer’s creditworthiness.
- Authorised dealers tend to partner with major banks to offer preferential loan rates and financing packages, making financing more straightforward.
- Some parallel importers work with third-party financing companies that provide car loans for PI vehicles, though interest rates may be higher.
- Always check with your bank and compare financing options before committing.
Tip: Some PI dealers have their own financing partners—compare rates from banks and financing companies to secure the best deal.
LTA Type-Approval & Compliance
- Every imported car must pass LTA inspections before registration.
- Japanese vs. UK Imports: Some regions have different safety and emissions standards, requiring additional modifications.
- Some PIs handle this process smoothly, while others leave it to the buyer, potentially causing delays in registration.
Tip: Ask if your car is already LTA-approved or if additional work is needed before registration.
Insurance for Parallel Import Cars
Some insurers charge higher premiums for imported cars due to:
- Unknown repair costs.
- Safety data not being as widely available or having different specifications compared to authorised dealer versions
- Some models may not be insurable under standard policies especially modified or rare vehicles.
- Compare quotes before purchasing to ensure your car will be properly covered.
Tip: Confirm with your insurer before committing to a PI car purchase.
Most Popular Parallel Import Models in Singapore
- Toyota Sienta Hybrid – Some motorists say it offers better features than the local version.
- Honda Vezel Hybrid – Only available via PI import.
- Toyota Alphard/Vellfire – A luxury MPV option, often cheaper through PIs.
- Honda Shuttle – A practical family car that’s generally cheaper as a PI model.
Tip: Check whether the PI model includes the same safety features as the local dealer’s version.
Parallel Importer Reputation & Consumer Protection
- CASETrust Accreditation: Ensures the dealer follows fair trading practices.
- Check the Singapore Vehicle Traders Association (SVTA): Membership signals a reputable business.
- Verify the Parallel importer is registered with ACRA (Accounting and Corporate Regulatory Authority) before making a deal: The ability to import a vehicle into Singapore depends on both Singaporean regulations and the legal framework of the exporting country. Some exporting countries restrict car sales to parallel importers, limiting availability, while others permit free trade in vehicles.The authorisation for parallel importation depends on the legal framework of that particular jurisdiction, noting that some countries permit it while others do not.
Red Flags for Fraudulent Dealers:
- Large upfront deposits with no clear delivery timeline.
- Selling cars they don’t actually own.
- Company has no physical showroom.
- Prices that seem “too good to be true”.
Future of Parallel Imports in Singapore
Stricter Regulations Coming?
The Land Transport Authority (LTA) continues to enforce stringent compliance checks on all imported vehicles, including those brought in by parallel importers (PIs). While no new restrictions have been announced, there is ongoing scrutiny over emissions, safety, and compliance standards. Future regulatory changes could introduce tighter environmental and technical compliance requirements, affecting the availability of certain models from PIs.
Electric Vehicles (EVs) and PIs
Many emerging EV brands, such as Ora, BYD, and certain Tesla models, are primarily available through parallel importers. PIs offer more variety and alternative EV options, often ahead of authorised dealerships. However, consumers should be aware that some PI-imported EVs may face challenges related to servicing, software updates, and warranty coverage, as they may not be supported by official local distributors.
Are There Government Incentives for PI-Imported EVs?
Singapore provides several incentives for EV adoption, including the Electric Vehicle Early Adoption Incentive (EEAI) and the Vehicular Emissions Scheme (VES). These incentives apply to eligible EVs regardless of whether they are imported by an authorised dealer or a PI, as long as they meet the required standards. However, buyers should confirm if their specific PI-imported EV qualifies, as certain rebates and warranty benefits may be tied to official dealerships.
Tip: Before purchasing an Electric Vehicle from a PI, verify its eligibility for Singapore’s EV incentives on the Land Transport Authority website and do remember to confirm after-sales support options, including servicing and warranty coverage.
Frequently Asked Questions (FAQ)
Parallel importers: Commonly Asked Questions
What's the difference between a parallel importer vs. authorised dealer?
A parallel importer purchases from an independent dealer who imports vehicles directly from overseas, often at lower prices but with varying warranty and after-sales support. An authorised dealer sources cars directly from manufacturers, ensuring full warranty coverage, after-sales service, and compliance with local regulations, but typically at a higher price.
Are parallel importers legal in Singapore?
Yes, parallel importers are legal in Singapore, but they can raise intellectual property concerns, particularly in areas such as trademarks and branding. They must also comply with the Land Transport Authority (LTA) regulations, including vehicle inspections and emissions standards.
Are parallel imports fake?
No, PIs are not fake, but they may differ in specifications and warranty coverage compared to authorised dealer versions. Buyers should verify the credibility of the importer before buying.
How do I avoid parallel import scams?
- Verify Legitimacy – Check if the dealer is registered with the Accounting and Corporate Regulatory Authority (ACRA) and is CASETrust-accredited.
- Check Reviews & Complaints – Research the company online, read customer reviews, and check if complaints have been lodged with CASE (Consumers Association of Singapore).
- Avoid Large Upfront Payments – Be cautious of dealers requesting full payment or large deposits before securing the vehicle. Always get a proper receipt.
- Inspect Contracts & Warranty Terms – Ensure all agreements are in writing, including warranty details, refund policies, and expected delivery times.
- Confirm Car Availability – Ask the seller for official documents that verify ownership and registration details.
- Choose Reputable Dealers – Parallel importers with a track record, and ideally those that are members of the Singapore Vehicle Traders Association (SVTA).
- If It Sounds Too Good to Be True, It Probably Is – Be wary of offers that are significantly lower than market prices, as they may indicate a scam.
Do parallel imports come with warranties?
Yes, but these are importer-backed, not manufacturer-backed. Read the terms carefully.
Are parallel imports harder to service?
Some models require specialised parts, which may take longer to source.
Are parallel imported cars cheaper?
Yes, PIs are gernally cheaper. The price of a car reflects various overhead costs such as branding, showroom expenses, and marketing, which are often absent when buying from parallel importers.
What benefits do parallel imports have to offer?
Overall, parallel imports offer several benefits to consumers in the Singapore market, including lower prices, increased competition, access to a wider range of car models and brands, and potentially better servicing packages. While there may be some drawbacks to consider, parallel imports can be a valuable option for consumers who are looking for a more affordable and competitive car buying experience.
