More RoRo, more problems

THE government's decision to extend the age of import of used vehicles from three years to eight will have a significant impact on the country. Not all of it will be good.

The previous guidance from the Trade Licence Unit of the Ministry of Trade limited imports to sedans, station wagons, and SUVs running gasoline, diesel, CNG or hybrid engines to three years from date of manufacture. Cars with an electric motor powered exclusively by a rechargeable battery pack were set at two years.

There has been no clarification on how the new extension will affect purely electric vehicles.

While the government touts the extension as a good thing for the average citizen, with the potential to reduce the cost of owning a vehicle, the decision brings its own social costs.

For Visham Babwah, president of the Trinidad and Tobago Automotive Dealers Association (TTADA), is concerned about the change.

Mr Babwah's perspective is valuable, because he has hands-on experience in importing and selling vehicles. The TTADA lobbied in 2010 for a six-year extension of the limit.

Vehicles older than that, he believes, are a risky import proposition, since they are already past half of their expected useful life.

His other concerns should also caution buyers. A car that was manufactured eight years ago is not an attractive proposition for a banker approached for a loan, and that vehicle is on the verge of being ineligible for full-comprehensive insurance.

More flexibility in pricing because of the change will increase the number of vehicles on the streets, adding to already intolerable congestion.

By September 2024, there were 1.1 million registered cars on the road. This number has been challenged, since the Transport Ministry does not make public the number of vehicles that have been de-registered.

Knowing how many vehicles are actually operating on TT roads would seem to be a good starting point for understanding the car sales business.

A flexible quota of used cars allowed for import was imposed in 2012 and is normally capped at less than 15,000 per year.

Used car businesses compete robustly with new car dealers. Used cars account for roughly a third of the overall market for car purchases.

Older, cheaper cars open the market to the budget conscious, but dealers are only required to provide a three month or 3,000 kilometre warranty on the vehicles they sell.

There is clearly a need for government to match this age limit expansion with a matching commitment to more robust inspection and verification of roadworthiness of used cars at the point of entry. Increasing the warranty period would protect owners of "new-old" vehicles.

Without robust oversight, TT faces the possibility of allowing potentially dangerous rolling rubbish to stream out of containers onto our already busy streets.