Customers lose $331,600 in sudden closure of two car dealers: Consumer watchdog

Universe Motoring (top) has since vacated its premises in Turf Club Road, while Karz Automobile has vacated its premises in West Coast Highway.
Universe Motoring (top) has since vacated its premises in Turf Club Road, while Karz Automobile has vacated its premises in West Coast Highway.PHOTOS: UNIVERSE MOTORING/FACEBOOK, SGCARMART

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).

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.

The buyers said they had entered into contracts to buy pre-owned cars from the two dealers. However, the vehicle ownership records with the Land Transport Authority (LTA) were never transferred to them.

This was despite the customers making payments and taking delivery of the cars.

In one case, the consumer paid in full for the car but did not receive vehicle ownership even after two months, despite sending several reminders to the car dealer.

One of the affected customers, who wanted to be known only as Mr Azli, told The Straits Times he had paid Karz Automobile about $23,000 as a deposit and booking fee for a $69,500 secondhand seven-seater Mazda 5.

The 46-year-old technical operation supervisor intended to pay the balance with a loan.

On the advice of a lawyer, he intends to file a police report, because if Karz Automobile is bankrupt, he may not be able to claim back any money from the company even if he sues.

He hopes that there can be more protection for consumers like him, he said: "The system is broken. It's very strange that only the buyer is liable for damages. Cars are not cheap - it's a big amount of money, so there needs to be more protection for the buyer."

 
 
 

Universe Motoring and Karz Automobile have vacated their respective premises at Turf Club Road and West Coast Highway. Attempts to contact both dealers were unsuccessful.

Consumers have lost about $822,000 from December 2018 to September this year after car dealers closed. During this period, Case received 26 complaints on the closure of at least seven motorcar dealers.

This is an increase from the 21 complaints recorded in the same period a year ago. However, the total amount lost is about 12 per cent lower than the estimated $931,000 lost between December 2017 and September 2018.

In most instances, the dealers had promised to transfer the vehicle ownership records within a few weeks, but the companies then closed without notice.

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

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 on the OneMotoring website.

After the dealer's application to initiate the transfer of ownership, a buyer should receive an SMS notification from LTA to log in at the OneMotoring website and accept the transfer of ownership.

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

The buyer can then make further payment to the dealer.

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.