Car workshops shouldn't be selling warranties

I know of someone who had a car warranty of seven years, provided by TWM. Surprisingly, the warranty was sold by a car workshop.

After less than two years, after collecting the premiums to provide the warranty, the workshop claimed bankruptcy ("Car dealer told to honour warranty despite dispute"; June 4).

Is the warranty not a form of insurance, since customers pay a premium to get their products covered?

Shouldn't warranties on cars be sold by an insurance company, then?

Do car workshops require a licence to sell warranties on cars? After all, insurance companies must be approved by the Monetary Authority of Singapore before they can sell their products.

What happens if such car workshops go bust? Is there any redress for car owners?

Why is there a need to buy a warranty from a car workshop? Is there no insurance company that offers this?

Vicki Lee Hui Fen (Ms)

A version of this article appeared in the print edition of The Straits Times on July 17, 2015, with the headline 'Car workshops shouldn't be selling warranties'. Print Edition | Subscribe