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Used-car dealers warned to adhere to amended MVIP

Published:Wednesday | September 24, 2014 | 12:00 AM

Tameka Gordon, Business Reporter

Fix it before you sell it and adhere to the stipulations of the warranty guidelines in the revised motor vehicle policy.

That's the word from Trade Board chief executive officer, Victor Cummings, in a warning to car dealers amid what he says are continued incidents of consumer complaints against sellers of second-hand vehicles.

The Trade Board issued a statement last week "encouraging dealers to adhere" to the amended Motor Vehicle Importation Policy (MVIP) amid pushback from dealers who say compliance is costly.

The Jamaica Used Car Dealers Association (JUCDA) conceded that dealers may be in breach of the MVIP, which came into effect in April, and which now requires dealers to provide warranties to vehicle buyers beyond the three months they previously did.

"It is quite possible that dealers have not been adhering to the policy," said JUCDA president, Lynvalle Hamilton. "We maintain that the policy was approved under a false premise," he said.

The JUCDA president said the MVIP will force new conditions of sale on consumers.

If the dealer is going to give a one-year warranty, "one of those conditions will very well be that the consumer has to service the car with the dealer and the dealer will also will also dictate when the car is to be serviced," he said.

That servicing period could very well be every two months, with a charge attached, and it is likely that the price of vehicles will increase to reflect the cost of pre-sale repairs, he said.

"There is no dealer that is going to know that there is the risk of replacing parts and not put that into the cost of selling the car," Hamilton charged.

"Let's say I purchase a Toyota Corolla and the cost to me is $1.45 million ... the car would cost the consumer $1.55 million. The dealers mark up and new warranty stipulations will see the consumer paying $100,000 more - that is what is going to happen," he said.

conditions of warranty

The amended policy stipulates the length of warranty to be offered as well as imposes kilometre readings that must now be factored into the warranty offered. For example, for a Class A vehicle, dealers must now extend a 12-month or 18,000-kilometre warranty.

Under the old system, dealers typically extended a three-month or 5,500-kilometre warranty to purchasers of used cars regardless of the year of the vehicle, Cummings explained.

"We've had too many complaints from consumers," he said.

"One person called and I advised them not to purchase the vehicle unless they get that warranty that is applicable to the vehicle, which in that case was six months," the Trade Board CEO.

He also cited the case of a young university student who took a loan to acquire a used car.

"After she buys the car and drives it off the lot, the tire explodes. The dealers said it's her problem; the tire is not under warranty. Three months later, the transmission goes and she still has to pay that loan and she doesn't have the car anymore because she can't afford to fix it," Cummings said.

"Think about the ordinary Jamaican consumer, fix up the car before you sell it," the Trade Board CEO said, his comment directed at dealers.

Such breaches will be policed under the dealer disclosure stipulations of the amended MVIP, Cummings said.

The MVIP now sets out that for each vehicle imported, dealers are now required to declare in writing that they "stand by the information submitted for the vehicle".

Hamilton says car buyers will opt out of extended warranties as they begin to feel the impact on their pockets.

"I can tell you that the consumer today prefers to get a car with three months' warranty and pay less for it than to pay much more for the car with one year warranty," the JUCDA president said.