Buyer beware: Hawker buys $74k second-hand car, finds out $5,000 repair cost not covered by lemon law

This young hawker recently paid $74,000 for a second-hand car so that he could travel to his economic bee hoon stall in Yishun at 4am every day.

But after his Volkswagen Golf broke down in just 12 days, imagine Emmanuel Lim's shock when he was informed that the used-car dealer is not obliged by law to fork out the $5,000 repair cost.

In an interview with AsiaOne on Thursday (Jan 16), 32-year-old Lim shared that on Jan 27, he bought a 14-year-old Volkswagen from car dealer Gears & Gasoline.

There were no issues with the car during a test drive at the dealership along Kranji Road, Lim said.

"Before buying the car, I asked the salesperson if repairs to the mechatronics unit are covered by the warranty. He assured me that it is."

But Lim shared that while driving the car on Feb 7, it "gave up" on him.

"When I accelerated, the speed of the car was only 30 km/h. I eventually managed to 'limp' home," he said.

'Salesperson not honest' 

After contacting the car salesperson about the issue, Lim said he was told that repairs to the mechatronics unit would not be covered by warranty "since it was outside of the gearbox".

Alleging that the salesperson "has not been very honest", the furious car owner said that he wrote an email to Volkswagen Group Singapore to clarify if the mechatronics unit is a component of the gearbox.

In a reply to Lim, a staff from the car manufacturer confirmed that the mechatronics unit is a component of the gearbox.

But after confronting the second-hand car salesperson, Lim shared that the former told him that the dealer is not bound by law to fork out the repairs since it's a "consignment car".

Loophole in Lemon Law?

In Singapore, the Lemon Law protects consumers against defects of goods purchased within six months here. This includes all goods purchased that are brand new or used.

But the law, which applies to only business-to-consumer transactions, does not apply to the sale of a used car by an individual seller to a consumer.

This also means that the Lemon Law also does not apply when used-car dealers sell the vehicles on behalf of owners - what the industry calls "consignment cars".

While he knew the second-hand Volkswagen is a "consignment car", Lim felt that the dealer should have informed him earlier on what it actually means.

"If I knew about the law in the first place, I would have thought twice about buying the car," Lim said.

"But as a consumer, I'm not very unfamiliar with the car trade. Why would I check what a consignment car is? So it's a loophole [for used car dealers]."

In 2018, the Straits Times reported that some used-car dealers were posing as direct sellers to sell their cars in a bid to avoid their warranty obligations under the Lemon Law.

Speaking out the news outlet then, Loy York Jiun, executive director of Case shared how his agency had received complaints about consignment cars.

"Such complaints are generally about consumers being unaware that the second-hand car they purchased was sold on consignment, thus they were not able to seek recourse under the Lemon Law after discovering that the car was defective," he said.

Lim: Dealer should 'take some responsibility' 

Locked in a heated dispute with Gears & Gasoline for weeks, Lim told AsiaOne that he has since resigned himself to pay for the repair costs of about $5,000.

This was even after he had towed his car to the dealership – hoping that the latter would "take some responsibility".

Besides the instalments for the second-hand Volkswagen, Lim shared that he is also paying $350 a week for a rental car to tide through this "difficult period".

Accusing the used-car dealer for "wasting his time" by stalling on the repairs, the hawker said: "I really depended on a car so that I could open my stall at 4am to prepare selling breakfast. And I have to pick up my three kids from school at 6pm every day.

"I still hope something can be done. The car broke down after 12 days, shouldn't the car dealer be responsible?"

Gears & Gasoline: Customer didn't perform due diligence

Responding to AsiaOne's queries on Friday (Feb 17), Gears & Gasoline said that a majority of their cars are listed under consignment. 

"And it's a common assumption that all car purchases from used-car dealers are covered by the lemon law," said the company, adding that this protection, however, doesn't extend to consignment cars.

"[But we] offer a one-year warranty which covers both the engine and gearbox component," a staff member from the used-car dealer, who declined to be named, said.

Addressing Volkswagen's email response to the car owner, Gears & Gasoline said that the manufacturer is "technically not wrong" in pointing out that the mechatronics unit is a component of the gearbox.

But this can be disputed from "another perspective", according to the used-car dealer.

The company said that many cars, especially Volkswagens and Audis are equipped with a unique advanced dual-clutch automatic transmission.

"The mechatronic unit is a computerised control part of the dual-clutch system. From the term 'mechatronics', you will realise that it is derived from a combination of mechanisms and electronics," said Gears & Gasoline.

The company also told AsiaOne that their salesperson had answered Lim's query during the test drive on whether damages to the mechatronics unit is covered by warranty.

"But we are not able to provide any evidence on this since it's words against words," the staff member said.

"There's no negligence fault found with our salesperson and it'll be unfair to accuse our company if the customer did not perform [his] due diligence".

ALSO READ: 'Like burning money': Man buys second-hand BMW but he's forced to take public transport every day

chingshijie@asiaone.com

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