The Malaysian Insight

IT was only the second day after Nik Muhammad Izwan Nik Mohd Kamel launched the website scrut.my, to helps authenticate the quality of reconditioned cars, when he received the first threat against his person.

By the first week, many of his friends and acquaintances in the reconditioned car business were also angry with him and his partner Ahmad Aliff A.S. Ahmad Shariffuddin for blowing what they claimed was the industry’s dirtiest secret.

By developing and distributing scrut.my, the two software programmers exposed the cheating that they said is rife in the reconditioned or “recond” car market, which imports an average of 30,000 units per year.

A “recond” is essentially a second-hand vehicle built and used in a foreign country but imported by local dealers.

Despite being second-hand, these vehicles are sought after by locals because of their high quality compared with their counterparts sold in the Malaysian market.

For between RM35 and RM50 per query, consumers can use the website to check the true condition of almost any recond Toyota, Honda, Nissan or Japanese marque sold by dealers here.

The website provides data from Japan on the actual condition of the car, such as its mileage, repairs undergone and whether it has been in an accident, said scrut’s founders, who are motor-sport enthusiasts.

“As people who like cars, we’ve been frustrated over the amount of cheating and lying that goes on in the recond business. Almost 90% of people who sell recond cars cheat,” Nik Izwan told The Malaysian Insight.

“They adjust the mileage meters to make the car look like it’s been rarely used, they fabricate the original inspection forms, they tell customers that a car only has minor problems when, in fact, it’s been in a major accident.”

Recond Japanese cars as well as European marques from the UK are popular as they have better specifications and workmanship than the same models assembled and sold locally. And they are cheaper than a new car.

For instance, the average price for a new 2019 Toyota Vellfire is RM360,000 but a recond 2017 model from Japan costs about RM270,000.

“The price difference is big and the recond cars usually come with higher specs. I bought my own Vellfire believing that it was a high grade,” said Aliff.

“But when I checked with scrut, I found out I was conned but a dealer who promised that he wasn’t lying. So scrut is our way on ending this practice.

“This is our way of contributing to the public and to something that we are passionate about. We want the business to be transparent so that customers know what they are buying,” said Aliff.

From ‘S’ to ‘R’

Zainuddin Abdul Rahman, who heads the Malay car importers and dealers association (Pekema), admits that cheating and fraud are a problem in the industry.

“There are those who cheat and there those like me who are honest. Our imports are all authentic,” said Zainuddin.

He refused to reveal the scale of the problem in the industry but disputes scrut’s claim that 90% of them do it.

Zainuddin said scrut has impacted on the industry in the short time it has been around but doubts the accuracy of its data.

In response this, Aliff said the site relies on data from a company in Japan which collects inspection data from 140 auction houses there.

In Japan, when a car owner wants to sell a vehicle, he usually auctions it off, Aliff said.

This is when the car gets inspected to ascertain its true condition. Car dealers from all over the world then bid to buy the car.

Malaysian dealers will travel to Japan to buy and bring these vehicles back to sell in the local market.

“The cheating happens here, in Malaysia, when the mileage meters are changed or the original inspection papers are tampered with,” said Nik Izwan.

Through the website, a prospective buyer will be able to get the authentic, original inspection form that comes straight from the Japanese auctioneer, he said. All they have to do is key in the car’s chassis number and pay RM50 per query.

The inspection forms that a buyer receives rates a car from grade “S” which is the highest to “3” (average with issues to fix) to “2” (bad and one step above not running).

Cars rated “R” have been in accidents and they can range from “RA” (minor accident, repaired) to “RB” (heavy repair) to R2 (accident with rust or corrosion).

“People can question the authenticity of our data but my reply to that is the auctioneer has no incentive to falsify the inspection forms since they are auctioning the car off to dealers all over the world.

“Also, in the unlikely event that the Japanese auctioneer falsifies the form to say the car has 50,000km, for instance. Why is it the Malaysian dealer then further falsifies the form to say it has only 25,000km?

“Car dealers here have an incentive to cheat because before this, they can pass off a low-grade car for a high-grade one and the customer won’t be able to tell.”

To date, the founders said the website has about 5,000 registered users despite starting out on May 13.

“The second day, I already received a threat against me saying I’m going to have to ‘pay’ for what I’ve done,” said Nik Izwan.

“But I’m not worried. As long as I know we are on the side of the truth.”

The site currently provides data on recond Japanese cars and lorries. In the future, the duo plans to add data for motorcycles and vehicle data from the UK. – May 26, 2019.