‘Deportee’ Cars Hurting Dealers

by Brian Buckley

Wednesday, July 21, 2004

A lack of enforcement of licensing guidelines and a lack of regulation has allowed private citizens in Cayman to become de facto used car dealers, and the public is suffering as a result, according to many of the country’s automobile dealerships. 

Donald Darrach, Service Manager at Vampt Motors, said that the current laws in Cayman do not require an importer of many cars to be part of a dealer network.

“A piece of dirt (a place to sell the autos) and an internet connection allows anyone on the Island to become a car dealer,” he said.

In certain instances, used cars arriving in Grand Cayman have been rebranded. “On occasion, we’ve had people bring in their Lexus cars for repairs and service, or to buy parts. When we go to repair these cars we find they are not Lexuses but Toyotas,” said Mr Darrach. 

Additionally, Mr Darrach explained that consumers often purchase good, dependable used Japanese cars that will drive well for three to five years. However, a majority of these cars were built solely for use in Japan. As a result, owners of these used cars not purchased from licensed local dealers cannot obtain the needed parts because the parts were never planned for importation. 

These cars find their way into foreign markets for which they were not meant because Japanese consumers trade-in their cars after three to five years, and a glut of these cars exist in Japan.

One sales manager at a local car dealership added: “First of all, these used cars coming in devalue the cars on our lots. Our cars were built for the export market and we have parts for ten to 15 years down the road and our prices reflect that.”

Eventually, Cayman’s environment suffers. “When drivers of these cars without serviceable parts realise they cannot repair their car, they end up adding to the landfill of the Island,” said Mr Darrach. 

“The local dump should be loaded with these Japanese cars,” added the local sales manager.

For many of the local, licensed dealers, this situation is more than just losing profit. They see car owners who think they got a good deal come to the realization that the deal was not that good. “I see people sometimes two months after buying a used car like this walking to work. They spend a bunch of money and then they can’t use it. It’s sad and they’ll most likely have to buy another one,” said the sales manager.

The effects of price gouging and out-of-line profit ratios are widespread. One dealer noted that he had seen a dockyard lot selling cars for $1,000 each. When that same used car arrived in Cayman a private citizen was selling it for $16,000. Often times, the seller of a car like this will buy two or three cars for the $1000 just to have the extra parts for the car sold at the exorbitant rate. But those cars too end up seriously adding to the landfill.

Mr Darrach has admitted that licensed car dealers could be more forceful in terms of promoting more government oversight and more education for the public. “It does get frustrating. We tried to get a dealers’ group together, but I think we’re a bit weary of one another.”

At Horizons Autos, general manager Mike Kirkconnell proposed stricter regulation. “I think that there should be more regulation by the government,” he said. “For example, if anyone imports more than two vehicles a year, it should be obvious that they are in the vehicle sales business. They’re not just importing for themselves. They should be required to have a Trade and Business License like we all do.”

The sales manager thought regulations should place restrictions on older cars being imported. “If someone wants to bring in a used car, it should be no more than two-years-old. If they want to bring in a car older than that they should have to pay a higher percentage of clearance fees. A limit on the number of cars brought in by non-dealers should be enforced, too,” he said.

At Vampt Motors, Mr Darrach said his company puts resources back into the community. “We have sixty-two employees and we’re paying into those employees pensions and providing them with health care. It’s hard to compete in this area with a couple and an internet connection who can take full-profit,” he said. 

He continued saying that he agreed with limits and duties, while pointing out that all the information needed for regulation could be easily gleaned through government records, whether it be through customs or vehicle licensing.

Earlier in the year, Ken Chand, Branch Manager of Motor and General Insurance Co, told Cayman Net News that local insurance companies often refuse to insure these Japanese cars made for their domestic markets due to the inability to find parts for them. 

“That’s another problem. If uninsured cars are driving around, then this only creates more problems,” said Mr Darrach.

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