Sudden closure of 2 car dealers leaves buyers high and dry

Customers have lost $331,600 with the sudden closure of two car dealers, Universe Motoring and Karz Automobile, the consumer watchdog said yesterday.

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

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, despite the customers making payments and taking delivery of the cars.

Case said Universe Motoring and Karz Automobile have vacated their respective premises at Turf Club Road and West Coast Highway.

Attempts to contact Universe Motoring were unsuccessful.

In response to queries from The Straits Times (ST), the director of Karz Automobile, Kenny Yeo, said that the dealership had shifted lots from its previous premises to a new one within the same venue.

Mr Yeo said that he was unaware of complaints by customers to Case and has been receiving calls from concerned buyers and financiers after Case announced the closures.

Mr Yeo's lawyer, Mr Fan Kin Ning of DOP Law Corporation, told ST that he has contacted Case for clarification on the incident.

Mr Fan said his client will decide on the next course of action after receiving a response from the consumer watchdog.

ST has contacted Case for more information.

Consumers ST spoke to said they had lost money in transactions with the dealers.

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.

Another affected customer, who wanted to be known only as Mr Azli, told ST 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. If the company is bankrupt, he may not be able to claim any money from it even if he sues.

He hopes that there can be more protection for consumers like him.

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

Consumers have lost about $822,000 from December last year 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 last year.

In most instances, 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 last year, 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.