2 car dealerships suddenly close, customers lose $331,600: Consumer watchdog

SINGAPORE - Customers have lost about $331,600 with the sudden closure of two car dealers, Universe Motoring and Karz Automobile, the Republic's consumer watchdog said on Friday (Nov 22).

This is even as consumers lost about $822,000 from December 2018 to September this year from dealers that closed, a nearly 12 per cent drop from a year ago.

The Consumers Association of Singapore (Case) said it received three complaints on Universe Motoring and two complaints on Karz Automobile between September and October this year.

Consumers reported to Case that they had entered into contracts to buy pre-owned cars from the two dealers.

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 paid in full for the car but did not receive vehicle ownership two months later, despite sending several reminders to the car dealer.

Universe Motoring has since vacated its premises in Turf Club Road, while Karz Automobile has vacated its premises in West Coast Highway.

Between December 2018 and September 2019, Case received 26 complaints on the closure of at least seven motorcar dealers. Consumers lost an estimated $821,504 in pre-payments in these cases.

This is an increase from the 21 complaints recorded in the same period a year ago. However, consumers lost more money in this period from December 2017 to September 2018 – an estimated $930,748.

Most consumers reported to Case that the dealers promised to transfer vehicle ownership of the second-hand cars within a few weeks but the companies then closed without notice.

In some cases, consumers had their cars repossessed by finance companies, as the car dealers had not settled the financing for them.

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Case reminded consumers that since Nov 26, 2018, vehicle owners and buyers have to use SingPass or CorpPass two-factor authentication to apply for and confirm the transfer of vehicle ownership online at the OneMotoring website.

After the dealer's application to initiate the transfer of ownership, a buyer should receive an SMS notification from the LTA to accept the transfer of ownership by logging into the OneMotoring website.

The notification will also inform the buyer if the vehicle is still being financed.

The buyer can then make further payment to the dealer and decide to accept the transfer of ownership.

For the transfer of ownership to be complete, the vehicle should not be under financing or have any outstanding matters with the LTA such as road tax arrears.

This article was first published in The Straits Times. Permission required for reproduction.