Market Reports , , ,

UPDATED: 24-03-17

IMPORTING and selling cars in the UK can save buyers more than a third on a near-new Volkswagen Golf but consumers are warning of difficulties in claiming warranty, differences in equivalent UK-spec cars and less convenience features.

The concern about importing cars mirrors fears that Australian consumers would suffer if parallel imports – the importation of new and near-new cars from Japan and the UK – were introduced here.

This week, UK used-car group Motorpoint was reported in online publication Automotive Management that it has imported 100 brand new Volkswagen Golfs that will sell in Britain at a discount of about 35 per cent to an equivalent new-car price.

Motorpoint, which has 12 sites in the UK, has offered a Golf 1.2 TSI five-door hatch for £11,999 ($A19,270), a reduction of £6226 ($A10,000) off the UK list price of £18,280 ($A29,270).

Australian promoters of the parallel import concept should note that the Golf 1.2 TSI is not available in Australia, but the bigger-engined 1.4-litre 92TSI is here for $22,840 before on-road costs, showing that Australia already gets a more powerful Golf from authorised dealerships that is $6430 cheaper.

The Motorpoint move is designed to combat rising tax charges on UK new cars.

From next month, the Vehicle Excise Duty (VED) – basically an on-road tax for all registered vehicles – will increase from £30 ($A48) a year for a 1.2TSI Golf to £160 ($A256) a year plus a £140 ($A225) first-year tax, making a car bought after April 1 £270 ($434) more than one bought before that date.

In the Automotive Management article, Motorpoint managing director Mark Carpenter said the incoming tax rate rise was the reason for his company pre-registering the 100 cars.

He said he would not divulge where the cars come from but that they were not direct from the Volkswagen factory. However they were UK-specification cars.

Online forums have outed Motorpoint, finding that the cars – which have zero miles on the odometer – come from Cyprus or Malta which have similar design regulations as the UK.

Members of the forums state that though the cars are cheaper than equivalents bought in the UK, some respondents reported warranty issues, particularly with the reduced two-year warranty period.

Concerns about parts and servicing were dismissed by new owners who said the cars had no problems at the garage.

It is too early to tell if the current batch of imports will suffer with a lower resale price though there are very few indicators that show the cars were initially imported from another country.

Respondents also said the imported cars, which generally have close to zero kilometres, miss out on UK-specifications such as heated seats and real-time traffic alerts within the audio system.

In comparison to UK-spec cars, prospective buyers noted that there was no factory-backed finance offers – such as zero per cent interest – attached to the Motorpoint cars and that the difference could make the UK car a better buy.

Motorpoint deals in used cars and imported new cars. It has, since the early 2000s, imported cars from other countries that have similar specifications – including emissions – to UK models.

These cars are usually overstocked and unsold in another country. Motorpoint imports the unused cars and registers them in the UK as new cars. The registration shows the vehicle as being brand new but the build-date and the remaining manufacturer’s warranty show them to be older cars.

Motorpoint is claimed to be the UK’s biggest independent car retailer with almost 7000 used cars for sale on its website. It deals with the manufacturer or agents in other countries to secure near-new cars, and with UK fleets and car hire companies.

Its business model is similar to a used-car warehouse in Australia, with a same-day, drive-away service that can include finance.

By Neil Dowling

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