Parallel imports open to dodgy dealings

Finding your car has been stolen, packed in a container, and shipped to Australia – where you've shelled out good money for it – will come as unwelcome news.

But worse still, you may also be told that your car has been repossessed, leaving you out of pocket to the tune of possibly hundreds of thousands of dollars.

It's not only a very real possibility, warns David McCarthy of Mercedes-Benz Australia, it has already happened. McCarthy, Senior Manager for Public Relations, Product and Corporate Communications for the prestige importer, spoke with motoring.com.au earlier in the week, concerning an impending government decision to act on recommendations by the Productivity Commission to lift restrictions on used-car importation. More recently, the federal government has tacitly supported the idea.

"Next week, this issue goes to Cabinet," McCarthy explained. "I don't know what the recommendation's going to be... but there's an issue that really concerns me.

"If [a buyer] buys that vehicle in Australia... he has recourse if the vehicle is stolen, if the vehicle has finance on it, if it's been involved in a serious accident – say it's two cars made into one.

"You have protection under consumer law."

Should the government open the floodgates for grey imports, McCarthy believes consumers will not have the benefit of the consumer protection so readily taken for granted when buying a car from within the local market.

"What protection is the minister, the government, going to implement, to protect consumers?" he asked.

The Benz spokesman is aware that the repossession industry frequently deals with high-end exotics stolen overseas and rebirthed in Australia as grey imports. These cars can be repossessed here, despite the latest 'owner' having purchased the car in good faith. And the first the owner may be aware there's a problem will likely be when he or she walks out the front door to find the car being removed on the back of a tray truck.

McCarthy says that standard procedure for the repossession industry is to remove the car without necessarily letting the owner know in advance, since the owner will understandably make every effort to prevent repossession.

"Three months, four months down the track, there's a knock on their door. They look out, and there's their car on the back of a 'flat-top'. Guy gives you these papers and says: 'Sorry, I'm taking this car; it was actually stolen in Islington in London seven months ago. Here's the VIN number, it all matches up; I've taken possession of the vehicle. Goodbye.'"

If you're lucky, McCarthy says, the repo man may let you remove your personal possessions before the car is taken away. They'll likely clamp the wheel before letting you anywhere near the car again, however.

McCarthy admits this would be a last resort for a finance company or a former owner, but in the case of an exotic car worth big bucks, the legal hoops would be worth jumping through – even if the car is presently in a completely different jurisdiction.

"Is it going to be worthwhile for a $10,000 Corolla? Of course not...

"Is it going to be worthwhile for a $250,000 or $400,000 car? Absolutely..."

McCarthy doesn't contend that someone buying a Ferrari worth $150,000 for $68,000 from a UK vendor necessarily 'knows' that the car is hot or the owner has defaulted on the lease repayments; sometimes it's simply too hard to determine whether the car is subject to an encumbrance overseas or has been stolen before being shipped to Australia.

Nevertheless, it remains a serious risk for grey importer buyers – and it's just one of the risks posed by easing grey import restrictions, McCarthy says.

Picture courtesy of Tim Felce/Wikimedia Commons