Differences Between Authorised Distributors (AD) And Parallel Importers (PI)

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So, you have decided to buy your first car. I bet you are so done with those long OT nights and weekly Maggi-noodle diet. You got to do what you have to do to save up, am I right? Buying a car in Singapore is a huge personal investment and making the right one, never fails to reduce you into a bundle of nerves. 

However, fret not. Let’s get the first order of business out of the way. Are you planning to get a car from a parallel importer or an authorised dealer? 

Most of the time, people would say, “Hey man, trust your gut”. And we are saying, not for this matter! It is important to weigh your options and make an informed decision before coming to a decision. Is your gut feeling really worth betting potentially hundreds of thousands for? 

But before that, let’s discuss a little bit on what is a parallel import and an authorised dealership.

Parallel importers (PIs) are basically smaller businesses that purchased the cars directly from the home factory and re-sold them to their customers (at profit) without doing all of the above. They are car re-sellers rather than distributors. 

Authorised dealers (ADs), to simply put, are those spaces with the shiny showrooms and scintillating interiors. Enter one and you can see how shiny their cars on display are and how the light effortlessly bounces off it. And as states, they are authorised to carry the cars they sell.

Now, let’s weigh the pros and cons of both PIs and ADs. 

Car Make/Model

Some PI’s carry models that ADs don’t have. And if you’re a gearhead, you may appreciate this part a little more!

Warranty & Reliability

With ADs (authorised dealers), you usually get at least a three-year warranty. You also get a servicing deal (e.g. free servicing for the first 10,000 miles).

Most PIs offer free servicing, but car owners would have to pay for the replacement of parts. Also, PIs issue their own warranties, so there is a slightly higher level of risk when it comes to after-sales support.

That said, many PIs are reliable and offer proper warranties. Take note that as with any industry, there could be black sheep that will try to cut corners.

Availability

If you want to buy from PIs, you may need to wait a few extra weeks as car re-sellers don’t get regular, predictable stock.

Stock depends on individual PIs’ buying strategies. For instance, certain PIs only specialise in European cars, so they only sell BMW and Mercedes cars.

Another factor is the location where they get their cars from. Authorised dealers can get cars from regional factories.

For instance, Kah Motor can ship a Honda that’s made in Thailand, which takes a shorter time. Parallel importers, on the other hand, buy from the original factory in Japan, which makes them slower. But, this also means that the workmanship on those cars may be better.

Service Quality

While authorised dealers are sizeable companies, PIs are disparate, individual businesses. ADs tend to have better facilities and trained staff, but parallel importers may have inconsistent service quality. This doesn’t mean they will always suck, it just means that they may provide better servicing than ADs, or they might provide next to no after-sales support.

But with Facebook reviews and internet resources, you can easily do an online search to get reviews on PIs from fellow netizens. You’d be glad to know that there are parallel importers who give good servicing and proper warranties as well.

But there’s one thing that PIs have in common: they don’t allow you to test drive cars. This is related to car insurance issues.

If you have time to do proper research, need to save that $20k – $40k, and you don’t want a second-hand car, parallel import cars might be worth considering, especially now that COE prices are at an 8-year low.

Spare Parts

PIs sell cars from a range of different manufacturers. Logistically, this means that stocking replacement parts is more difficult and with older cars models, there is a risk that certain parts may no longer be produced.

At the ADs, stocking parts is easier when you only have a few specific models. Servicing is probably faster and more efficient because the workshop is stocked with the right parts.

On the other hand, considering that most of us aren’t going to keep our cars for 10 or 20 years, the risk of unavailable replacement parts is slim.

Pricing

Being that authorised dealers contain expensive requirements. They need stunning showrooms, a huge staff, marketing activities, etc. The cost of those overheads is factored into their car prices.

The difference in prices between PI cars and AD cars varies from $20K to $40K. Currently, a Mercedes-Benz SLC-Class 180 (A) costs $246,888 from Cycle & Carriage Industries while a parallel importer may be offering it for $210,000. That means savings of about $36,888.

Now with all the information provided, you can definitely make a better and more informed decision when choosing your car.

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