As the demand for affordable vehicles grows, South African consumers must be vigilant against the rising threat of ‘grey’ (illegally imported) vehicles in the market. While these vehicles are often sold at attractive prices, they carry significant risks that can lead to severe legal and financial consequences.
Grey vehicles are those that have been imported illegally into South Africa, without following the proper legal procedures, often bypassing customs regulations and safety standards. While they might appear to be a good deal due to lower prices, they can have hidden costs and risks. It’s crucial for consumers to be aware of the dangers associated with these vehicles.
Key Statistics and Issues
- Grey imports contribute to significant revenue loss for the government. The National Association of Automobile Manufacturers of South Africa (Naamsa), reported that R3.8-billion per annum was lost in tax as a result of grey imports in 2020, and this figure increased significantly to R8-billion in 2022.
- Mikel Mabasa, CEO of the Naamsa, highlights the scale of the problem: “Illegally imported second-hand vehicles make up 7.5% of South Africa’s 12.5 million car fleet. These cars are often involved in criminal activities because they are not traceable.”
Identifying Grey Vehicles
Consumers should be vigilant and take the following steps to identify potential grey vehicles:
- Check Vehicle Identification Number (VIN): Ensure the VIN matches all documentation and is not tampered with. Any discrepancies could be a red flag.
- Inspect Registration Papers: Ensure the vehicle has a full service history and all necessary documentation, including import papers and registration certificates.
- Microdot Verification: Microdot verification is unique to South Africa and as such, consumers are urged to request a microdot certificate or take the vehicle to a microdot fitment centre for verification.
- Research the Seller: Purchase only from reputable dealers and perform background checks on private sellers.
- Look for Unusual Modifications: Be wary of vehicles with unexpected or undocumented modifications, which might indicate attempts to pass off a grey vehicle as legitimate. Be cautious if the vehicle model is not commonly found in South Africa.
- Suspiciously Low Prices: Prices significantly lower than the market average for similar models are often an indication that a vehicle may be illegally imported. Avoid deals that seem too good to be true.
Consequences of Purchasing a Grey Vehicle
- Buying a grey vehicle can lead to severe repercussions:
- Legal Risks: Possession of an illegal vehicle can result in fines, vehicle seizure, and even criminal charges. In the event of an accident, the driver could face liability issues, and in some cases, jail time if found guilty of knowingly purchasing and using an illegal vehicle.
- Lack of Warranty and Parts: Grey vehicles often do not come with a manufacturer’s warranty or after-sales support, and buyers of these vehicles are likely to face challenges in obtaining spare parts.
- Insurance Issues: No insurance company in South Africa will knowingly cover grey vehicles. This leaves owners of grey vehicles without protection in cases of accidents or theft. Even if a policy is initially granted, it may be invalidated upon discovery of the vehicle’s status at claim stage.
- Financial Loss: Without insurance, owners bear the full cost of repairs or loss due to accidents or theft. Additionally, resale value for grey vehicles is significantly lower, leading to financial loss.
Understanding the full scope of risks associated with grey vehicles, including insurance and liability issues, is crucial for making informed decisions. Illegally imported second-hand vehicles pose significant risks and challenges to South Africa’s economy, automotive, and insurance industries. Consumers are urged to remain vigilant and to make informed decisions. They should prioritise safety and legality, and consider the broader impact of their vehicle purchases.