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25 car dealers caught up in model year mix-up - JUCDA says 2,500 vehicles affected

Published:Friday | July 5, 2013 | 12:00 AM
Lynvalle Hamilton, the president of the Jamaica Used Car Dealers Association.File

 Marcella Scarlett, Business Reporter

More than half of the Jamaica Used Car Dealers Association (JUCDA) members are reportedly caught up in the manufacture/ model year mix-up, according to the top spokes-man for the sector.

Lynvalle Hamilton, the president of the Jamaica Used Car Dealers Association, said 25 or more dealers may have sold mis-dated vehicles to customers.

He referred to the vehicles only as 'suspect', saying that investigations to be carried out may well determine that for some, the model years disclosed were indeed correct.

Hamilton's disclosure paints the scope of the problem as much wider than previous reports, which indicated that the mix-up involved at least six dealers. The JUCDA president also said that non-members also appear to be affected, but had little information beyond the anecdotal.

"We would know what we have brought in and what I can tell you is that the problem is big. Very big," said Hamilton.

"Based on the information we have collected to date, there are more than 2,500 suspected vehicles brought in by more than 25 dealers."

The affected JUCDA members amount to just under 56 per of the association's current active membership of 45 auto traders, and about 12 per cent of the listing the 169 certified car dealers listed on the Trade Board's website. The Financial Gleaner was unable to ascertain immediately whether all dealers on the Trade Board list were actively importing vehicles.

The model year mix-up appears to be confined to vehicles made in Singapore and Thailand.

The Trade Board typically uses specified digits in the Vehicle Identification Number (VIN) assigned to each vehicle by the manufacturer to verify the age of imported vehicles. However, for Singaporean vehicles, the 10th digit - generally used to identify the year of manufacture for vehicles with 17-character VINs - is always a zero. The Trade Board has relied on the declared age when processing import permits for such vehicles, or use other means to verify the age.

The loophole has led to incorrectly dated vehicles entering the market. The anomalies have emerged over time as the vehicles undergo repairs or valuations.

However, in at least one case, a supplier based in Japan has complained formally to Jamaican authorities that the dealer changed the age to a newer model. Zulfiquar Motors Company Limited disclosed its complaint to the Financial Gleaner, citing impatience with what it considers a prolonged investigation with no results.

Johanna Lewin, commissioner of revenue protection at the Revenue Protection Division, confirmed that the allegations by the supplier is under investigation.

"We are in the process of investigating several allegations made by Zulfiqar. They are aware of the work done so far, but seem to be extremely impatient and unaware of the work that has to be done to establish evidence as opposed to information," said Lewin.

FTC building case

For affected consumers, the mis-dated vehicles imply that they overpaid for the vehicles and are paying more for insurance than the real age of the vehicle requires.

The Fair Trading Commission is building a legal case around 43 complaints from customers about six dealers, and expects to take the dealers to court in about two months, says Executive Director David Miller. The Consumer Affairs Commission is also getting complaints and is doing its own tally.

Miller says the FTC will argue in court that the dealers, which the agency has declined to identify, misrepresented information to customers.

Hamilton said that while the sector is heavily exposed and could face high compensation costs, it was difficult to say which dealers were more vulnerable to losses.

"Say, for instance, a dealer takes in several cars now and don't take any more until the next six months, then clearly a dealer that does more business would be more likely to be in it deeper than the one who does business seasonally," said the JUCDA president.

"You have small dealers who bring in only a few cars at a time and you have others who bring in hundreds at a time; and clearly a dealer who can invest J$100 million in one go will be in deeper than, say, another dealer who has J$5 million or J$10 million," he said.

Hamilton said the members of JUDCA have agreed not to import any more vehicles where the model year cannot be determined from the VIN.