Two car dealers in Singapore have closed suddenly causing customers to lose S$331,600.

The Consumers Association of Singapore (CASE) on Friday, Nov. 22 issued an alert as a result of these closures.

CASE said it received three complaints and five complaints on the sudden closure of Universe Motoring and Karz Automobile respectively within two months, from Sep. 1 to Oct. 31, 2019.

Universe Motoring has since vacated its premises at Turf Club Road, and likewise, Karz Automobile had left its premises at West Coast Highway.

Consumers told CASE they had entered into contracts to buy second-hand cars from the dealers.

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 even paid in full for the car.

Despite sending several reminders to the dealer, he did not receive the vehicle ownership two months later.

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

Seven closures in 10 months

From December 2018 to September 2019, CASE received 26 complaints relating to the closure of at least seven car dealers.

An estimated S$821,504 in pre-payment losses were involved, CASE said.

Red flag

A major red flag of these car sales involved the promise to transfer vehicle ownership of the second-hand cars to the buyers within a few weeks.

This was what most consumers who reported to CASE experienced.

The car dealers then closed without notice.

The transfer of car ownership can be done immediately on the spot.

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

CASE said in its statement: "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."

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

Steps to transfer vehicle ownership

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

A dealer can initiate a transfer of the vehicle ownership.

When that happens, the buyer will receive a text message from the Land Transport Authority (LTA) to accept this transfer.

This can be done by logging on to the OneMotoring website.

The text message also lets the buyer know if the vehicle is still under financing.

The buyer can decide whether to make further payment to the dealer and to accept the transfer of ownership.

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

For the transfer of ownership to be successfully completed, the vehicle should not be under financing.

This is because the dealer will need to discharge the financing.

The transfer of ownership will be successful if there are no outstanding matters such as road tax arrears with LTA, CASE also said.

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