ORCHARD Credit, the auto financing company, has returned to the used car business with a bang.

It is behind the newly set up Auto Avant-Garde on Alexandra Road which specialises in pre-owned exotics and luxury cars.

Auto Avant-Garde's showroom - opposite the Mercedes-Benz Centre - is currently stocked with rare high-end models such as a Porsche 911 GT3, BMW Z4 M Roadster, BMW M5 and Lexus LS460.

And according to Renny Heng, who runs Auto Avant-Garde with partner Sebastian Lee, a Ferrari 360 Challenge Stradale may soon be driven into the showroom.

'We are back where my father started 30 years ago,' says Mr Heng, referring to Robert Heng, who began Orchard Credit in the mid-1970s to provide car loans, before branching out in the early 1990s to become a major used car player.

'Back then, Orchard Credit was already offering pre-owned Rolls-Royce and Ferrari cars,' the younger Mr Heng adds. 'That's when I fell in love with cars as a kid hanging around in the showroom.'

But Orchard Credit decided to move out of the used car trade in the late 1990s when the market was badly hit by the Asian financial crisis and the escalating number of deregistered cars, although it retained the auto credit division.

'We exited the labour-intensive retailing part of the business but continued with the financing aspect,' adds Mr Lee, who was in charge of Orchard Credit's used car operation then.

Now, however, Mr Lee believes the time is right for the industry.

'The market is ready because of lower deregistrations and a smaller COE quota,' he says, referring to the decline in the number of cars being scrapped and the likely reduction in the amount of certificates of entitlement for new cars.

'Those who are squeezed out will turn to the used luxury market,' he says.'

More importantly, he says, Auto Avant-Garde is offering its services in a niche segment, where the competition is less fierce. There are only a handful of players here offering such high-end models in the pre-owned market.

'Of course there are people who prefer to buy new exotics but they also need to trade in their current car. So we take it off them. Also, there are those who upgrade or downgrade and we provide this service for them.'

Mr Lee says the cars in Auto Avant-Garde's showroom are usually bought from their owners.

'Pre-owned exotic cars are usually offered for sale on a consignment basis,' explains Mr Lee. 'But as far as possible, we try to buy the car outright from the customer. We provide such extra services because affluent sellers don't like the uncertainty of such an arrangement.'

Together, the two partners say they have invested about $2 million so far.

And already, they are looking for new and bigger premises in the Leng Kee Road area.

Mr Heng says the 1,800 square foot Alexandra Road showroom can hold about eight cars, plus four more outside.

'We don't have enough space for our cars, or parking space for our customers,' he says. 'But we want to retain this showroom because Alexandra Road is the main thoroughfare and we want to establish a visible presence here.'

This article was first published in The Business Times on Mar 12, 2008.