Customers lose about S$331,000 after sudden closure of 2 car dealers

Customers lose about S$331,000 after sudden closure of 2 car dealers

Screengrab from Google Maps
Screengrab from Google Maps showing West Coast Car Mart, where Karz Automobile was located.

SINGAPORE: The Consumers Association of Singapore (CASE) on Friday (Nov 22) issued an alert after two car dealers suddenly closed, leaving customers thousands of dollars out of pocket. 

"From Sep 1, 2019 to Oct 31, 2019, the Consumers Association of Singapore has received three complaints and five complaints on the sudden closure of Universe Motoring and Karz Automobile respectively," said the association in a media release.

Consumers told CASE they had entered into contracts to buy second-hand cars from the dealers, but after making payments and taking delivery of the cars, the companies failed to transfer vehicle ownership records with the Land Transport Authority (LTA) over to them.

One 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 dealer.

Citing feedback from consumers, CASE said Universe Motoring has since vacated its premises at Turf Club Road and Karz Automobile had left its premises at West Coast Highway.

In total, the companies' closures saw customers lose S$331,600, said CASE.

From December 2018 to September this year, CASE received 26 complaints relating to the closure of at least seven car dealers.

"These complaints involve an estimated S$821,504 in pre-payment losses," said CASE.

READ: CASE issues consumer alerts regarding closure of two car dealers

Most consumers reported to CASE that the car dealers had promised to transfer the vehicle ownership of the second-hand cars to them within a few weeks, but then closed without notice. 

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

"CASE would like to caution consumers that should the dealer not settle the outstanding financing, consumers 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 application to transfer in good faith," said the association. 

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


Vehicle owners and buyers have to use SingPass/CorpPass two-factor authentication to apply for or confirm the transfer of vehicle ownership on the OneMotoring website.

Once a dealer applies to initiate a transfer of the vehicle ownership, the buyer will receive a text message from the Land Transport Authority (LTA) to accept this transfer by logging on to the OneMotoring website.

The text message also lets the buyer know if the vehicle is still under financing, and the buyer can decide whether to make further payment to the dealer and to accept the transfer of ownership.

If the financing has been fully settled, consumers will no longer receive the prompt that the vehicle is still under financing, said CASE.

For the transfer of ownership to be successfully completed, the vehicle should not be under financing - the dealer will need to discharge the financing - and should not have any outstanding matters such as road tax arrears with LTA, added the association.

Source: CNA/nc(mi)