If you are buying or selling a car, better insist that the transfer of ownership is done within 7 days. By LTA regulations, the car dealer is required to do so within 7 days anyway, or face fines and/or jail term.
Why is it so serious?
There’s a scam that goes like this:
To get loans to buy cars, the dealer would enter into flooring agreements with finance companies.
Under each such agreement, the dealer would transfer the registered ownership of a car it bought to its financier, so that the finance company would have the right to repossess the car if the dealer defaulted on its loan repayment terms.
When the used-car dealer bought a car on credit, it was supposed to inform the finance company of the price at which it bought the car, and sell the car and repay the loan as soon as possible, lest more interest accrue.
Now, if the dealer wanted to expand his business and fleet of cars and to increase cash flow, he would do something sneaky: he will withhold transfer of ownership even after buyers had paid for and collected these cars.
This happened in February 2015, after more than 20 customers reported that cars they bought (and paid in full) were being towed away by the creditor of Cars Today. (http://www.asiaone.com/singapore/errant-used-car-dealer-back-business)
Several other cases reported of owners having their cars blocked by repo men, even if the car had belonged to them.
In 2010, a Mrs Muthu was in for a rude shock. A month after paying $80k for their car, a swarm of men emerged from several cars and made an attempt to repossess their vehicle. (https://www.valuebuddies.com/thread-287.html)
It presents risk for the previous owner also: if there are violations and crime being associated with the car, the previous owner is implicated because for all means and purposes, the car still belongs to him.
It doesn’t take long to transfer ownership. It is usually done within a day and there is zero excuse for not doing so.
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