JOHOR BARU - A 10-year-old car is considered not roadworthy in Singapore. And with taxes to be paid after half the lifespan, it makes sense to scrap cars after five years on the road in the republic.
For Malaysian middlemen, that's a golden opportunity.
These middlemen buy luxury cars at scrap value in the republic, bring them into Malaysia, produce forged papers - apparently with help from some corrupt officials - and sell the cars at good prices.
Malaysian buyers are willing to take the risk to get their hands on luxury cars, as they are still far cheaper than the ones in registered car dealerships.
The cars are, on average, priced almost 10 times lower than the market price of a similar model in Malaysia.
A businessman, who wanted to be known as Mike, said buyers were willing to take the risk of buying such cars despite knowing that they could run into trouble with the law.
"It is so much cheaper than buying a second-hand car in Malaysia. The Singapore cars are usually just above over five years old and still in good condition," he said.
Citing an example, he said a second-hand Mercedes-Benz that cost about RM80,000 (S$26,000) here would only cost RM10,000 if illegally brought in from the republic.
"We engage with our Singaporean contacts and a driver would be sent there to drive out the car, passing through two immigration checkpoints in the republic and Johor Baru," he added.
Then, it is up to the buyer if he wants to duplicate an existing car registration number or do an under-the-table registration with the Road Transport Department (JPJ). However, both comes with risk, he claimed.
Mike said although "cloning" the registration number of another car was much cheaper than registering the car with JPJ, the risk was higher.
"Usually, they look for a similar car model and colour, preferably from a different state, before duplicating the plate. With inside help, the dealers are able to get an original print copy of the road tax.
"However, the car will be without valid insurance. If JPJ conducts checks against the vehicle's chassis number, the driver could be in trouble," he added.
As for registering with JPJ, he said buyers would have to fork out about RM15,000 to get a licensed car importer to issue a permit to import for the car.
A JPJ officer can then help register the car and create a new grant. Customers are even given an option to register the car under running numbers or their chosen numbers.
Customers can then apply for insurance and easily renew their road tax every year.
Mike said that if the registration was cloned, the buyers would have to wait for the original owner to renew the road tax before it could be reprinted.
He claimed that he received an average of three to five customers monthly, most of whom were willing to spend an average of RM25,000 for a variety of luxury cars, especially Mercedes-Benz and BMW.
A driver who brings scrapped cars out of Singapore into Malaysia said some luxury cars could be sold for up to RM40,000 along with the vehicle's original grant.
The cloning process alone is about RM5,000 to RM6,000.
He said buyers could opt to clone the registration of a scrapped Malaysian car of the same model and make or from other existing cars on the road.
He claimed there were also ways to alter the chassis number of the cars to match the grants of the scrapped Malaysian cars.