Sudden closures of two car dealers cost customers S$330K

PHOTO: Getty Images

SINGAPORE — Customers of two motorcar dealers, Universe Motoring and Karz Automobile, have lost more than S$330,000 after the sudden closures of the two companies.

In a media release on Friday (22 November), the Consumers Association of Singapore (CASE) said that it received a total of eight complaints on the companies closures from 1 September to 31 October this year.

Consumers had complained that they had entered into contracts to purchase pre-owned cars from Universe Motoring and Karz Automobile. However, after making payments and taking delivery of the cars, the two companies failed to transfer the vehicle ownership record with the Land Transport Authority (LTA) to them.

In one case, the consumer had paid in full for the car but had yet to receive the vehicle ownership two months later, despite sending several reminders to the car dealer.

Companies already vacated premises

Based on consumers’ feedback, Universe Motoring has already vacated its Turf Club Road premises, while Karz Automobile has also left its West Coast Highway premises.

CASE said in its media release that, from December 2018 to September this year, it has received 26 complaints relating to the closures of at least seven motorcar dealers. These complaints involve an estimated S$821,504 in prepayment losses.

Most consumers had reported that the car dealers had promised to transfer the vehicle ownership of the second-hand cars to them within a few weeks, but the companies closed without notice. In some cases, consumers had their cars repossessed by finance companies as the car dealers had not settled the financing.

CASE has warned consumers that, should the car dealer not settle the outstanding financing, they run the risk of their cars being repossessed by the finance company despite having made full payment to the dealer and proceeding with the online transfer application.

It advises consumers to refrain from making further payment to the dealer until the dealer shows that the outstanding loan has been discharged.

Affected consumers of the motorcar dealer closures may approach CASE for advice and assistance (Hotline: 61000315). Consumers who suspect possible fraud should also report such cases to the police.

Precautions when buying pre-owned vehicles

Consumers are also advised to take note of the following when purchasing a pre-owned vehicle:

  • Understand the ownership transfer process for pre-owned vehicles. When buying or selling a used vehicle, or when a vehicle changes hands, the ownership of the vehicle must be transferred to the new owner within seven days. More information is available on the OneMotoring website.

  • Negotiate with the seller for a lower amount of deposit to mitigate the risk of money lost in the event of a sudden business closure.

  • Put all verbal agreements in writing such as dates for handing over of car and transfer of vehicle ownership.

  • Consider patronising CaseTrust-Singapore Vehicle Traders Association accredited motoring businesses as they are committed to fair trading.

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