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Old 11th June 2008, 05:04 PM   #1 (permalink)
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New cars imported as used - to attract less tax

New cars imported as used - to attract less tax
Parallel importers use revised rule to bring in high-end cars at cheaper prices


TALES of used cars passed off as new are rather old. But now, some parallel importers are declaring new cars as used - in what could be attempts to benefit from a revised ruling that inadvertently leads to lower taxes for imported second-hand cars.

Last September, the Land Transport Authority (LTA) lifted a barrier on imported used cars when it ruled such vehicles are eligible for scrap rebate, like new cars.

The rebate, paid by the Government to the owner if he scraps the car before its 10th year, can amount to several hundred thousand dollars for some cars.

Since September, about 60 imported used cars have been sold here, including a Rolls-Royce, Honda NS-X sports car and a stretched Chrysler limousine.

Many more are on sale now. But industry sources said some of these are actually in showroom condition, but declared as 'used' to attract lower open market value (OMV).

OMV, determined by Singapore Customs, is the rate on which car taxes are based. Hence, the lower a car's OMV, the less tax it attracts. Importers are able to sell such a car more cheaply, and often still enjoy a healthy profit.

Parallel importers who bring in cars this way focus on high-end models, because used cars from overseas are liable for a $10,000 special tax.

One popular import is the Nissan GT-R sports car.

The average OMV for parallel-imported new GT-Rs is $80,000, while a subsidiary of authorised Nissan agent Tan Chong has brought in cars with OMVs of $115,000.

Now, a 'used cars' advertisement on car retail website sgcarmart.com lists a GT-R that is less than five months old and which clocked only 138km.

That's less than some brand new cars found in showrooms here.

Its advertiser claims its OMV is $65,000, and is asking $258,000 for it - about $22,000 less than brand new parallel imports and $72,000 below Tan Chong's.

One trader said the OMVs of some GT-Rs brought in this way are much lower.

The development may pose yet another challenge for authorised agents who have been losing ground to parallel importers.

Motor trader Karsono Kwee, 60, who lost 5 to 10 per cent of Porsche sales to parallel importers last year, said: 'It's beyond our control. We can't compete with them because our OMVs are much higher.''

Mr Kwee added that some parallel importers are enjoying fatter margins than authorised agents because of their lower OMVs.

Mr Eric Chan, 39, Mercedes-Benz general manager at multi-brand agency Jardine Cycle & Carriage, reckons consumers who buy low-OMV cars because they are cheaper 'do not know that they are buying at a disadvantage''.

He pointed out that a low OMV also means a low scrap rebate.

For instance, an eight- month-old Mercedes SLK200 with an OMV of $26,000 would fetch a rebate of $13,000 if scrapped just before its 10th year.

On the other hand, a brand new one from Cycle & Carriage would attract $25,000.

Another example: an 18-month-old BMW 730Li with an OMV of less than $30,000 would fetch $15,000, versus $44,000 for a new car from BMW agent Performance Motors.

But car buyers shrug off the difference. Asked if he would buy a 'used' GT-R with a low OMV, enthusiast Kevin Kwee said: 'As long as the price is right and the annual depreciation is right, it's okay.''

A leading parallel importer said he is aware of the new goings-on. 'Some of the OMVs of these so-called used cars are less than half the OMV of a new car,'' he said.

'If this carries on, I don't know how the rest of us are going to continue our business.''

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Old 11th June 2008, 05:08 PM   #2 (permalink)
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Re: New cars imported as used - to attract less tax

this kind of "used" car i definally wont mind

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Old 11th June 2008, 05:18 PM   #3 (permalink)
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Re: New cars imported as used - to attract less tax

all that i know is that.
all GTR is being tested in a race track in japan..
so it can come in 100km+ in the odometer.

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Old 11th June 2008, 09:51 PM   #4 (permalink)
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Re: New cars imported as used - to attract less tax

I also don't mind this 'used' car.

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Old 12th June 2008, 10:27 AM   #5 (permalink)
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Re: New cars imported as used - to attract less tax

Now if anyone knows of any of these dealers that sell "used" cars, let me know.

I might be able to change car sooner than expected!

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Old 12th June 2008, 11:20 AM   #6 (permalink)
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Re: New cars imported as used - to attract less tax

mi 2 mi 2

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Old 12th June 2008, 12:47 PM   #7 (permalink)
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Re: New cars imported as used - to attract less tax

do calculations first hor. you might end up losing more in terms of paper value than gaining in terms of initial list price discount. dun be penny wise pound foolish.

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Old 12th June 2008, 09:18 PM   #8 (permalink)
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Re: New cars imported as used - to attract less tax

if going to keep the car for more than 10 yrs ok la.... where got paper value aft 10 yrs anyway lolz

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Old 13th June 2008, 12:33 AM   #9 (permalink)
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Re: New cars imported as used - to attract less tax

actually if more people think like you then we will have less cases of ppl going into financial difficulties. COE is a stupid system that makes ppl think that car >5 years is CMI. i think it's nonsense.

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Old 13th June 2008, 01:14 AM   #10 (permalink)
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Re: New cars imported as used - to attract less tax

Originally Posted by happily1986 View Post
actually if more people think like you then we will have less cases of ppl going into financial difficulties. COE is a stupid system that makes ppl think that car >5 years is CMI. i think it's nonsense.
I agree, I like to spend on my car so after all the body kit, suspension work, etc a bit heart pain to let go of my car in 3 to 5 years.

But then again, most people I know do not take care of their cars. They go for servicing only semi-regularly, and do not maintain the rest of their car. Hence, the lifespan of the cars they drive shortens and it is risky buying used cars that are too old.

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Old 13th June 2008, 09:27 AM   #11 (permalink)
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Re: New cars imported as used - to attract less tax

lolz... to drive a car more than 10 yrs = heavy investment... u need to find a gd... nice n reliable car.... most of those in the range of 150-250k... tis the main reason tat put off young buyers cos the $$$ is huge....


ya... tat y always chk n request their serviciing booklet if getting 2nd hand car.... i will nt consider any car without servicing booklet or servicing records on the car.... tat would be the first to chk follow by the car chassis.... lastly the suspension n brakes which r consider expandable materials...

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Old 2nd July 2008, 08:53 PM   #12 (permalink)
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Re: New cars imported as used - to attract less tax

I think LTA would be looking at this seriously. Not worth it to import new car as used.

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Old 15th July 2008, 03:49 PM   #13 (permalink)
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Re: New cars imported as used - to attract less tax

Pretty cool idea.

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