Sunday 28th September, 2008


Dealer predicts more vehicle thefts, fraud

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President of the Pre-Owned Automotive Dealers’ Association Inshan Ishmael walks past a fleet of used-cars at his Bamboo Settlement No 1 business on Tuesday. Photos: JENNIFER WATSON

by Shaliza Hassanali

Brace for more thieves and fraudsters, with the increase in motor vehicle tax that was announced by Finance Minister Karen Nunez-Tesheira during last Monday’s budget presentation.

This is what Inshan Ishmael, president of the Pre-Owned Automotive Dealers’ Association, predicts. He also said the new tax, which would mostly affect low and middle-income earners, could lead to inflation jumping from 12 to 19 per cent by year’s end.

Speaking to the Sunday Guardian on Tuesday, hours after the new tax on private vehicles was imposed, Ishmael, who manages a roll-on roll-off business named ROC at Bamboo Settlement, said with the tax increase, knocked down cars would be a highly sought-after commodity, which would fuel the resurgence of fraudulent activities in the used-car industry.

“Not only that... it can cause an industry that is ripe with theft and fraud to worsen.”

Ishmael said for the past seven years he had been trying to bring an end to knocked-down cars entering the country, which he said was illegal.

The cars, most of which are Nissan B13 and B14, come dismantled in containers from Japan.

“These cars are then assembled, complete with engines, and are sold for approximately $12,000. A false number plate is attached and the vehicle is put on the roads,” he explained.

Loopholes in system

Ishmael noted that most times these cars were used to commit robberies and kidnappings.

Every year, Ishmael said, between 2,500 and 3,000 illegal cars flood the nation’s roads, because there were too many loopholes in the system.

He said there was nothing being done to track cars with illegal number plates.

He also said SUVs would attract thieves mainly for original parts, which would increase in value because of the new tax.

Ishmael claimed that 90 per cent of cars recovered by the police after a crime spree were found to have illegal licence plates, which can be purchased any and every-where.

“It’s going to reach an alarming proportion now, so if you think fraud is prevalent wait until the end of the year,” he added.

Ishmael said a used-car, which was now going at $60,000, would cost between $67,000 and $68,000 when tax was added.

“You would obviously buy the knocked-down car, which would be far cheaper,” he said.

Ishmael said a few days ago the police pulled over a man driving a knocked-down car with the same number plate of a North-West Regional Health Authority ambulance.

Last Tuesday, Ishmael had a meeting with acting Commissioner of Police James Philbert during which he said he divulged certain information on the illegal activities in the car industry.

“In fact, Mr Philbert immediately called in the Stolen Vehicles Squad to get cracking on this. An investigation has now started.”

Ishmael said he was willing to work with the CoP and the Port-of-Spain licensing office, which needed to be decentralised.

Philbert confirmed that he had met with Ishmael.

Another nail in coffin

Sitting in his office, his fingers interlocked, Ishmael said the increase in tax was another nail in the coffin for the motor vehicle industry.

“The Government is out to destroy us by any means necessary,” he lamented.

He said the announcement came like a thief in the night, and that the situation was made worse as the measure went into effect on September 23, within hours of its announcement. Ishmael felt the Government could have implemented the new tax at the start of January, 2009, giving them at least three months’ grace.

Of the 250 cars Ishmael has been allowed to sell this year, 210 were purchased.

Thinking he would have seen an influx of customers the day after the budget, Ishmael said he saw only a trickle, with no one giving a commitment to buy.

“I thought customers would have rushed in here to get the remaining 40 vehicles which would have been tax-free. But this wasn’t the case.”

In a bid to keep his business afloat, Ishmael said his suppliers promised to absorb some of the costs, but couldn’t say for how long.

During the last year, Ishmael said the used-car industry had taken a nosedive in sales, which resulted in more than 150 dealers folding up business within a matter of months.

If the used-car dealers go under, Ishmael said approximately 20,000 employees would face the breadline.

Ishmael, however, was more concerned about customers who had placed orders for vehicles that were being shipped from Japan and Singapore to T&T.

Ishmael said a customer had pre-booked a $350,000 Lexus, which he had paid for in full.

“Now this customer would have to fork out an additional $40,000 in tax. I don’t know if he would ask back for his money or I would end up with the Lexus on my hands. I would have to wait and see.”

In addition, Ishmael said several customers who had approached the banks for loans would now have to restructure their finances.

Some customers, who had made down payments towards used-cars, were demanding their money back, since they could not afford the additional cost.