Could lemon law add to costs?
Car dealers raise concerns that new regulation may increase business costs
04:46 AM Sep 05, 2012
by Vimita Mohandas
SINGAPORE - The new lemon law that took effect this month is meant to protect consumers, but the Singapore Vehicle Traders Association (SVTA) is concerned that some consumers may make frivolous claims and that business costs will go up for its members.
Dealers said that some consumers may make use of the lemon law when COE prices plummet unexpectedly and buyers feel they overpaid for their cars.
As a safeguard, car dealers have been encouraged to send used cars for evaluation checks to avoid fraudulent claims. However, doing this will drive up their costs with more items now on the checklist. According to SVTA, such checks now cost between S$168 and S$200, an increase of between S$25 and S$32 per car.
And when customers ask for a refund or for the car to be replaced, "who is the independent (body) to judge what's a fair amount?" asked SVTA President Neo Tiam Ting.
But the Consumers Association of Singapore (CASE) said the law is important for those who bought second-hand vehicles as they may not be covered by a warranty.
CASE President Lim Biow Chuan said: "The lemon law provisions are meant to assist the consumer to go back to the retailer to say, 'look, even though this is a second-hand car, I expected that certain parts of this car would be in a workable condition'."
Meanwhile, the SVTA noted not many dealers are aware of how the law works. "They are not very clear whether we need to pay them, or compensate them, or repair it," Mr Neo said.
The Ministry of Trade and Industry and CASE have held some 40 seminars and roadshows on the new lemon law.
Another 15 sessions are expected to be rolled out in the next two months.