Parallel Importer Buying Experience

One lazy Sunday afternoon, we had an appointment to view a car at Automobile Megamart. It’s our first time going into this eight storey building in Ubi packed with all things about cars. Driving up the ramp to the 5th storey, carefully navigating through narrow driveway, we arrived at Shin Automobile, where we were going to check out a Toyota Sienta.

I’ve purchased all my prior cars from authorised dealers. Like most people, I think that buying a car from a parallel importer is inherently more risky than going with the authorised dealer. Buying a car costs a small fortune in Singapore, so it’s something you want to be very careful about. Furthermore, the risks don’t just end with the buying and driving away of the new car, because there’s also the after-sales support and warranty matters to consider.

Ten years ago, I would have just gone to an authorised dealer. After all, there must be good reasons for them to be selected to represent their brand principals. It’s almost like buying from the brands themselves.

The market for parallel import cars has since matured somewhat. The horror stories of unscrupulous operations from the days of yore are now less common. Instead, I’m hearing a lot about happy customers, and how parallel importers are turning around to become a dependable and reliable alternative to authorised dealers.

There are still risks, of course. Just this month police reports were made against Exodus Global for failing to deliver cars that customers had ordered, and which in at least one case was fully paid up for. In 2014, the Volks Auto scam had involved some $3 million in down payments.

I decided this time around I would keep an open mind to consider parallel importers. To some extent, I had to, because I couldn’t find any other car from authorised dealers that was a great combination of function, comfort, performance, and price. There are other models available from parallel importers to consider.

We arrived at Shin Automobile, and the whole family checked out the Toyota Sienta. Yes, this is one of those cars you can’t get from the authorised dealer, at least not at that time. Borneo Motors begun selling the Sienta in the later part of September.

As much as I wanted to keep an open mind, I was inherently apprehensive and suspicious about what I was getting into. This dealership on the 5th storey of Automobile Megamart, well, wasn’t on the ground floor. There wasn’t a grand showroom with expansive marble floors, soft plush sofas and cappuccino machines. There wasn’t an army of sales staff, not that I enjoyed them ambushing me like how it is at authorised dealers. This was a simple showroom. Perfectly functional, of course. We came to look at cars, not to drink coffee.

The boss, Ken, attended to us. He was introduced to us by a friend, who had been a customer. Word of mouth is important in this business. There is no way by browsing forums and through random Google searches that I would end up on the 5th storey of Automobile Megamart, to seek out this dealership set amongst a thousand others in this building.

Apart from showing us the highlights of the Toyota Sienta, Ken spent considerable effort to address my concerns about buying from a parallel importer, and a little bit of how the business works.

Most parallel importers don’t actually import the cars themselves, but instead buy through a middleman that brings in the cars from overseas. A far smaller number of dealerships, Shin Automobile included, import cars on their own. Cutting out the middleman means removing one layer of margin, and also provides the benefit of more visibility and control over the entire process.

Parallel imported cars go though a lengthy process of type inspection and approval. Some customers literally wait months to get their cars. In my case, I was looking at a car ready for registration, which means that all the inspection and approvals are completed, and the only thing that remains is to get COE and register the car. In fact, the car I get is the car I’m looking at. With an authorised dealer, the car you get is going to be sitting in some warehouse or yard, and the only time you get to see it is when you collect it. Of course, since all cars are new and the same, you might not mind not seeing the actual car earlier. But if you could, it’ll be nice right?

In as far as servicing and warranty is concerned, some dealerships opt to outsource to a third party. This means that, for example, warranty is transferred to another company, and any future issues you have with the car necessitating a warranty claim will go to the third party, not the dealership you bought the car from. With Shin Automobile, servicing and warranty is in-house.

Now, there are pros and cons to these arrangements. One could argue that the third party specialising in servicing and warranty could have better economies of scales to operate more profitably and hence offer better value to customers. They may be able to operate at multiple locations, no different from how Borneo Motors may have many service locations throughout Singapore.

On the other hand, the third party arrangement could be a source of tension and disagreements. You aren’t the direct customer to the third party, after all. Their primary goal is to increase value to the dealership, which is their customer, not to you.

I’m somewhat indifferent to the arrangement, but Ken was clearly proud that Shin Automobile provides servicing and warranty in-house. I like that people are proud of what they do, of what they believe in. In fact, he’s also proud of what his customers say of his business, and he spared no effort to point out reviews from customers.

[Side note: While on the topics of reviews, allow me to state that this review is not sponsored, it is not paid for, nor was it even suggested. It is entirely voluntary.]

We negotiated a package, with a couple of freebies, and including to take in my used car. Simple and straightforward. I had a number (i.e. the price) that I could take home to digest. I don’t like to be hastened to make a big decision.

Obviously, I had to do some due diligence. This includes some research on Shin Automobile, and also comparing offers from other parallel importers. I checked out Jack Cars and TTS Eurocars, among others. The Toyota Sienta is highly popular, so it’s available at many parallel importers. The difficulty with making exact like-for-like comparison is that there are so many variations of the Sienta. The higher-end “G” model could have basic colours or flextone colours (which cost more), option of “LED package”, option of the Toyota Safety Sense C, number of airbags, and perhaps more others. Everyone’s cars were different in one way or other, and not everyone had cars available for immediate registration, even if I didn’t care about colours.

Buying from a parallel importer feels so liberating compared with an authorised dealer. Typical with authorised dealers, there’s only one designated insurer and one designated bank, in order to enjoy all the discounts reflected in the price on the price list. At Shin Automobile, I had flexibility with bank and insurer. I could choose the insurer that I like, rather than the insurer that the dealership prefers. (Though, I should note that the interest rate offered by banks through authorised dealer were somewhat lower than what I had on the table.)

I suppose with the size of the authorised dealer’s operation, everything is a template. You have to do it their way, and there are only so few options you can choose. In fact, sometimes the extra freebies you get out of the sales staff at authorised dealers just come out of their own pockets.

The last time I bought a car, WhatsApp hadn’t yet existed. Today, we use WhatsApp to do all sorts of things, more than just mere messaging. It’s put to good use at Shin Automobile too. Using WhatsApp, I ordered the leather upholstery colours, received insurance quotes, sent copies of documents, etc. It’s so much more convenient that I can sort out these matters anytime, anywhere, instead of having to be physically at the dealership’s premises.

Two and a half weeks after putting in my downpayment, with COE acquired, an auspicious date was picked for registration, and then the car was ready for collection. It could have been a little earlier, but I wasn’t in a great hurry and preferred to arrange a convenient date and time to pick up the car.

One of the freebies in my deal was a 15-inch sports rim. The arrangement was that Ken would bring me to a tyre shop to pick the rims of my choice. That’s really great, as I get to choose rims that I like. Everyone has different tastes, so it’s best to leave it to the customer to personalise their new ride.

Authorised dealers may let you upgrade fabric to leather upholstery, but usually not give you colours to choose from. Here, I have personalised rim selection and leather upholstery colour choices, it makes the car a lot more mine, and although to an untrained eye it may be hard to tell my Toyota Sienta apart from another one of the same colour, I will know for sure which one is mine.

I went to Shin Autowerkz, the servicing arm of Shin Automobile, for the 1K servicing. I was truly impressed with the fast turnaround of my car. My car was ready in about 40 minutes. I had, in the past, always dreaded going to Borneo Motors or Kah Motor, because even with an appointment, I would find others slotted in front of me, and I’d have to twiddle my thumbs for the next two hours or so. Or, perhaps it is those authorised dealer’s hidden agenda, that I should check out the newer cars in the showroom so that I might be tempted to upgrade earlier than later.

My experience with Shin Automobile has been very positive. Increasingly, there are dealerships like Shin Automobile which strive to be as professional as they can be, to compete in the same league as the authorised distributors. It’s a pity, though, that you typically can’t test drive with parallel importers.

I’m not saying that you should rush out to buy your next car with a parallel importer, but that the point is these dealerships are a legitimate alternative to authorised distributors. They sell cars, just like the authorised distributors, offering you a greater variety of choices to pick from. Why not consider them if they offer a great deal?

Of course, you must still do your homework. However, with pervasive community sharing on forums and social media, it’s not too difficult to suss out the bad apples, and learn about the good ones.