Car buyers demand refund from dealer: Tips on how to avoid rogue car dealers

More than 20 people gathered outside Volks Auto at Macpherson on Dec 15, 2014. -- ST PHOTO: AZIZ HUSSIN
More than 20 people gathered outside Volks Auto at Macpherson on Dec 15, 2014. -- ST PHOTO: AZIZ HUSSIN

SINGAPORE - If the deal is too good to be true, it probably is, said an industry veteran in response to the Volks Auto debacle.

Up to 80 customers have been left in the lurch after they paid deposits on cars to the owner of Volks Auto, a car dealership in MacPherson. The owner has disappeared and the parallel importer has been closed since Saturday.

How can you tell if you are dealing with a rogue car dealer?

Here's some advice from the Singapore Vehicle Traders Association (SVTA), and the Consumers Association of Singapore (Case):

1. Be wary of prices that are too low

While car buyers should compare prices, they should be aware that the profit for parallel importers is "only a few per cent", said SVTA.

"If prices are eight or 10 per cent lower", it is suspicious, SVTA told The Straits Times.

2. Patronise certified car dealers

Case advised that consumers should patronise CaseTrust accredited dealers who will protect the consumer's deposit with a security bond. In a situation like the Volks Auto Pte Ltd where the company failed to deliver the car, the consumer's deposit will be protected.

Consumers can check the SVTA members' directory for dealers that are members of the association. Each dealer has to be recommended by two other members, and go through background checks before being admitted into the association.

3. Minimise deposit paid

With a non-accredited dealer, the deposit placed should be as low as possible so as to minimise risks, Case says.

4. Check the car dealer

Always check out the reputation of the car dealer before signing the contract. Consumers may want to avoid car dealers which are known to delay the delivery of cars, Case says.

Another indication of their trustworthiness is how long the dealership has been in business, says SVTA.

5. What if I've been scammed?

For consumers who think they have been cheated, they should approach the Small Claims Tribunals to lodge a complaint as soon as possible, while the company is still live. They can also consider lodging a police report or seeking further legal action against the company.

Case said it has received 14 complaints against Volks Auto Pte Ltd on Monday and Tuesday.

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