Car brokers: How genuine are their transactions?

Anywhere and anytime a deal can be struck as long as one has cash and the purchased item is in agreeable condition for both parties.
Their business locations are as informal as their business transactions. Some can be traced at car washing bays, on the roadsides and a few at organised parking yards, for instance, at the Pine along Lumumba Avenue in Kampala. These are the car dealers or call them the “middlemen” for the “third hand” vehicles.
Farouk Mutebi, a car dealer at FAMUS Motor Dealers in Nakawa, explains that these cars are called third hand because they deal in cars that have already been purchased from a bond, driven for some time and then sold to another party.
But how safe are their business transactions given the informal nature of their operations.

BUYERS’ EXPERIENCES

The bad
For John Nuwamanya, 35, the dream to own a car had alomost come true but then he made a call to a car broker whose contact he had picked on social media on July 4, 2014.
“He identified himself as Joel Kasode, a dealer in all used vehicles. He was very persuasive, a trait I think cuts across all car brokers. He briefed me about his business and I was attracted to trust him to get for me my first car,” narrates Nuwamanya.
Nuwamanya and Kasode later agreed to meet at Prowess Car Washing bay in Nateete where they both negotiated and nailed a deal, a car was bought.
“Initially, the car was priced for Shs12m but later we settled at Shs6m. I paid Shs4m in cash and we agreed that I pay the balance in installments for eight months, the guarantee was the car logbook,” he says.
Nuwamanya, however, says that four months later, Kasode called him saying they should revise the contract claiming he was delaying to meet his monthly payment obligations.
“I explained to him my financial situation in vain, until he towed the vehicle back to his parkyard and later sold the car and gave me Shs1m as my remaining share,” he says.
“I thought of taking the matter to court but that was extra cost I did not wish to incur, so I ended up giving up on the deal,” Nuwamanya tells his story.

The good
On the other hand, Johnny Mugabi, shares a completely different story. Mugabi who claims to own two cars, says he bought both of them using car brokers without any hustle during the sealing of the deal.
“Car brokers are cunning and one needs to be careful with who they are dealing with. Some are genuine and others are brisk business people,” he says.
“However, I have bought my two cars from Pine along Lumumba Avenue in Kampala and it is the car brokers that I have been dealing with without any problem,” Mugabi says.
So, with not many Ugandans likely to have the opportunity to buy brand new cars from manufacturers abroad, car brokers have offered many a simplest and quickest option to own a car.

Why deals go bad

According to Adam Kintu, a car broker and dealer at Pine, a renowned place for car brokers in Kampala, for any deal to go bad, in most cases it is the buyer defaulting on the agreed upon terms.
“Our business is the cars, whether old or brand new and we don’t sell them in air. But the most challenging thing is that only a few of our clients are genuine,” he says.
“Many people have bought cars from us but majority are thieves. For instance, someone comes and says he wants a car. You agree on a price say at Shs10m and he pays half of it,” he shares.
However, he adds that many clients do not return to clear their balance within the agreed time frame and often sell these vehicles in neighbouring countries.
“Many buyers we have dealt with always want to get a copy of the car logbook, and we have realised that they use this as a pass to again trade off the vehicle without even endeavoring to clear their debts with us,” Kintu adds.
“Our business is not bad, we are not bad characters like most people are made to believe, but those who cheat us are the ones who turn us into bad people,” he observes. Robert Mwesigwa, the sales manager at Appolo Motors, admits that just like in other business circles, some bad dealers do exist among car brokers.
“Many people have a bias that we sell cars with two logbooks and often claim that after selling them the vehicles, we connive with thieves to steal the vehicles. This might be true but people should not generalise,” Mwesigwa says.
According to Mutebi, car brokers are like any other businessmen trading in merchandise in Kikuubo, a business hub in the Central Business District, Kampala and making profits is their main target.
“Depending on who is buying, how knowledgeable that person is in automotive, how best that person can negotiate a better deal, chances are a car broker will cheat that person taking advantage of their ignorance,” he says. Unlike car bonds, he notes, which are established entities, most car brokers are briefcase operators and as a result, the car logbook is the receipt and the agreement.
“It is a trick that most car brokers use. Because they are not regulated by Uganda Revenue Authority [URA], only a few will genuinely sell a car to a client,” opines Mutebi who was once a car broker.
“Many cars these brokers deal in have no logbooks. They depend on agreements to sell them and in most cases, those are the cases of vehicles that police impound during operations,” he shares.

The logbook dilemma

Bruhan Lubega, a member on the Pine committee, also says since their business involves express trading with people that have emergencies, chances are high that you can get a raw deal.

“Most vehicles in Kampala have no logbooks, which is a fact we cannot hide but try to find a solution for this,” he says.
“One of the reasons why we set up an established management at Pine is that before a member amongus sells or purchases a car, we do a thorough research about it,” Lubega observes.
He also says on many occasions, they have discovered that many people steal cars from within or outside the country and rush to car brokers to get quick money.
“Most people know that our money is readily available since we also deal in express purchase for those in financial emergencies. In the process, we have landed on many stolen vehicles and for such, it is a deal gone bad for both parties,” he notes.
He, however, advises that for one to buy a car from any dealer without an established location, for instance, at washing bays orgarages, an agreement is paramount.
“Most car brokers don’t have car logbooks and as a result, it is important to consider an agreement that must be signed by at least three individuals with their identities clearly known,” He says.
Stephen Kansiime, the head of police traffic unit, advises that for people buying cars without car logbooks, it is better to opt for a car, however, cheap, with a logbook.
“As police I cannot advise one to buy a car without a logbook, because you cannot be sure how that particular car was acquired,” he advises.

A broker’s experience

For 10 years, Adam Kintu, 33 has been in the business of brokering cars, before he decided venturing into purchasing and importing them.
As a car broker, Kintu says he has had disturbing experiences dotted with huge losses.
“Having started as a car broker, the business was not all that rosy because we deal with people and some are either thieves or conmen,” he says.
For instance, one time I sold a vehicle to a businessman transporting goods from villages to Kampala, and since our business is informal, both of us agreed that of the Shs30m deal, he pays at least three-quarter of the amount, which he did.
I gave him a copy of the logbook and from mutual understanding; he was to deposit the rest of the money in installments for one year.
As a criterion to ensure that no one incurs a loss in a deal gone bad, often, we agree with our clients to give us copies of their workplace identity cards and a driving permit and at times where their other business are located.
But for this case, this gentleman deceived that his business was to drive long routes from Mbarara to Kampala and I trusted him since he had given me copies of his passport.
Since he was seeking to get his personal truck, I trusted him that he would struggle to pay the balance, but I was wrong.
Time went by and he was no where to be seen. But through various networks, with colleagues from different countries within the region, including police officers, I alerted my friends in police.
“The man was arrested when he had already sold off the car in the DR Congo,” he shares. “I was able to trace the car and recover it but it cost some money,” he says.
Kintu says that often such experiences have happened to them and as a result, they have resolved never to give out a copy of the car logbook for any car transaction that has a balance of more than Shs2 million.

Caution

For people buying cars without car logbooks, it is better to opt for a car, however cheap with a logbook.
For one to buy a car from any dealer without an established location, for instance at washing bays or garages, an agreement is paramount.
If you chose to go out and buy a car, you need to be knowledgeable about the car you are buying. You need to know how to negotiate a good deal because if you don’t, the broker will cheat you taking advantage of your ignorance.