Age limit tussle

• Used car dealers want older vehicles; No older than 4 years says ADA

BY PATRICK FOSTER Auto Editor fosterp@jamaicaobserver.com

Friday, August 19, 2011

USED-CAR dealers are raising their hopes that Government will increase the age limit on vehicles in light of the recent movement in Trinidad from four to six years.

But any increase over four years here could spawn a backlash from new car dealers.

According to president of Automobile Dealers Association (ADA) Kent LaCroix, new car dealers will accept a one-year increase and no more.

"We have agreed that we would not object to a movement from three to four years, that's our position," the ADA president told Auto.

LaCroix, whose association represents the interest of new car dealers, cautioned that if the age limit goes beyond four years "then we would have a problem".

"Then it (used car imports) could begin to affect new car sales," he said.

Currently the oldest cars legally imported are 2008 models. Pickups, trucks and buses have a four-year age limit.

Jamaican used car dealers have repeatedly complained about Government's three-year age limit on cars, arguing that it places them at a disadvantage and pushes up the price to consumers.

"We hope this [increase of age limit] will happen here soon," president of the Jamaica Used Car Dealers Association (JUCDA) Lynvalle Hamilton declared this week.

Kirk Crichton of used car dealership Crichton Automotive argued that extending the age limit would, in fact, help Government as well as the consumer.

"By increasing the year it opens the market a lot more," said Crichton. "It is a win-win for everybody, the consumer gets cheaper vehicles, Government gets more revenue and our sales increase."

Crichton added that being able to import 2006 vehicles would also benefit the small business sector.

"It makes the start-up cost for new businesses a lot more affordable," he insisted.

And according to Hamilton more than 70 per cent of countries in the region had no age restriction on vehicle imports.

Government reduced import duties in March resulting in a drop in car prices, but at the same time ignored the extension of the import age limit from three years, stronly requested by dealers.

"While we welcome the recent reduction in duty, the age restriction is also a pressing problem," Hamilton said Tuesday.

Permanent secretary in the Commerce Ministry, Reginald Budhan, while admitting to constant dialogue with industry players, declined to comment on the possibility of an increase in the age limit for vehicles.

"We know what their interests are, but I will not comment on the issue at this time," Budhan told Auto Wednesday.

But Hamilton is insisting that current developments in Japan will again push up used car prices on the local market, probably above that pre-Government's duty drop.

"Because of the shortage of new vehicles in Japan the domestic market is purchasing more used cars," Hamilton contended. "When that happens it increases competition [and] they pay higher prices for the car."

"For the most part we cannot purchase those cars," said Hamilton, adding that local consumers would not be able to afford such vehicles.

The JUCDA president added that the strengthening of the Japanese Yen was also driving up prices of vehicles bought in Japan.

"The yen is galloping, it is now about 76 and it is coming from the 90s," said Hamilton.

The next thing that Government can do is allow us to import older cars, he said, but added that the position did not sit well with dealers of new cars.

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Age limit tussle