Complaints against car dealers over warranty disputes on the rise in S’pore

The number of complaints received by the Consumers Association of Singapore over vehicle warranty claims seems to be on the rise, with 11 complaints lodged in 2023.

The number is up from seven cases in 2022 and six cases in 2021. And in the first eight months of 2024, the consumer watchdog received six complaints about car dealers refusing warranty claims.

These latest figures come after the Competition and Consumer Commission of Singapore (CCCS) warned car dealers in February to not impose warranty restrictions that prevent owners from taking their vehicles to independent or third-party motor workshops.

These may include requiring customers to service or repair their cars exclusively at the dealers’ authorised workshops for their warranty to remain valid.

The antitrust body has approached 26 authorised car dealers to highlight warranty restriction concerns in 2024. These include major distributors representing a mix of mass-market and luxury car brands.

A spokesperson for CCCS said it expected car dealers to remove all warranty restrictions and related material from their websites, warning them that such restrictions could flout rules under the Competition Act.

New cars bought from authorised distributors typically come with warranty coverage against defective parts or faulty workmanship. This can last between three and five years.

In 2017, after CCCS conducted a market inquiry, major car dealerships amended warranty terms that deterred customers from going to third-party workshops for repair and maintenance by giving the dealerships the right to void warranties if the cars had been serviced or repaired at independent workshops.

CCCS said it wanted to facilitate a more competitive market for car repairs and servicing, and market feedback at the time showed that authorised workshops charged “two to three times as much as an independent workshop for comparable parts and servicing”.

When asked, CCCS said the number of complaints it received relating to car warranty restrictions has dropped over the years since 2017.

It said in a statement in July 2024 that it receives “a small number of reports that some car dealers continue to impose warranty restrictions”.

The regulator said it is continuing to monitor the motor repair and servicing industry, especially with the proliferation of electric vehicles and cars becoming more digitalised. It said a point of concern would arise if third-party workshops find it difficult to access specialised diagnostic tools and software needed to work on newer vehicles.

Authorised car dealers that spoke to The Straits Times said their customers can go to third-party workshops without voiding their warranty, but they pointed out that there have been cases where customers did not keep proper maintenance records of the work done at independent workshops, used non-genuine parts or had modifications done.

These are grounds for the authorised dealers to void the vehicle warranties.

Third-party workshops said challenging the dominance of authorised dealers in the market continues to be an uphill challenge.

Mr Amos Mok, manager at Juzz For Cars, a third-party workshop specialising in BMW and Mini cars, said many customers are still unaware that they can go to independent workshops and not void their car’s warranty.

“The authorised dealerships have inculcated a mindset in the customer to believe that only they have the skills and equipment to handle new cars,” he said.

Mr Eric Goh, co-founder of Motor Edgevantage, an independent workshop that handles various European makes, said that for certain components like the engine’s control unit, there are testing equipment and proprietary software that are not available to third-party workshops.

Mr Francis Lim, president of the Singapore Motor Workshop Association, which represents more than 500 independent motor workshops in Singapore, said he has noticed that authorised dealerships are now offering long warranty periods for new cars. Some new cars come with a five-year warranty, with no cap on mileage.

He sees this move as a means to hold on to customers for longer and prevent them from going to third-party workshops.

“If the consumer’s car is under warranty and the routine servicing is free, why would he want to go to an outside workshop?” he said.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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