Beware the risks of illegal used car imports

Each year, 30 000 used cars are illegally imported to South Africa. Buying one could lead to significant trouble. Read more on the risks here.

South Africa outlaws the importation of used vehicles, yet around 30 000 illegal used cars (often referred to as ‘grey imports’) enter the country annually. These cars typically come from Botswana, Lesotho and eSwatini, revealed Gary Scott, the CEO of KIA South Africa, at the AutoTrader dealer convention in April, where industry leaders discussed the impact of these imports.

By bypassing official channels, these illegal imports evade taxes and duties, resulting in substantial government revenue losses and unfair competition for local dealerships and manufacturers. The National Association of Automobile Manufacturers of South Africa (Naamsa) estimates that illegally imported used cars cost the South African fiscus between R5b and R8b annually in lost taxes.

The issue extends beyond revenue loss. The influx of illegally used cars undermines local car market sales, hampers local manufacturing, stifles technological innovation, reduces job creation and facilitates criminal activity.

Consumers may be drawn to these illegal imports due to their lower prices. However, this affordability comes at a significant risk. “Illegal used car imports are often very old and may not meet local regulations and safety standards, potentially endangering motorists and other road users,” warned Naamsa’s CEO, Mikel Mabasa. Buyers also face difficulties obtaining warranties, spare parts and aftersales service. Additionally, these cars risk being impounded and destroyed, as noted by Scott.

Identifying illegal used car imports is challenging unless they display foreign plates. “We don’t have structured metadata to identify these cars,” explained George Mienie, the CEO of AutoTrader. “So, AutoTrader has created a Vin database to identify these illegal imports, ensuring consumer transparency.”

Stopping the flow of illegal imports is complex. “Multiple stakeholders need to collaborate to resolve this issue,” said Mabasa, citing SARS, the Department of Transport, the SAPS and the Metro Police as key players.

Some progress has been made. “We’ve already spoken to Transnet, and they’ve agreed to redirect vehicles intended for neighbouring countries from the Durban port to the Maputo port in Mozambique,” said Scott.

Scott further explained. “Many South Africans are unaware that used vehicles can only be imported under specific exemptions and only after a successful application to the authorities. Foreign-plated cars can only be driven by their foreign owners during their visit period.”

Buyers beware: if a deal seems too good to be true, it probably is. Your bargain purchase could become an expensive mistake.

Source: Haveyoursayza


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