Extension of Lemon Law to Cover Used Cars Sold by Car Dealers on Behalf of Owners

Mr Chua Kheng Wee Louis asked the Minister for Trade and Industry (a) whether the Government will consider extending the lemon law to cover used cars sold by car dealers on behalf of owners; and (b) if not, whether the Government will require used car dealers to provide an upfront declaration of the nature of its used car transactions to potential buyers.

Mr Gan Kim Yong: Used cars sold by car dealers on behalf of owners, also known as consignment cars, are consumer-to-consumer (C2C) transactions between the owner and the buyer, where the dealer provides a service to match the buyer to the seller. The Lemon Law only covers business-to-consumer (B2C) transactions and does not cover C2C transactions, which tend to be ad hoc and informal in nature. However, car dealers which misrepresent a C2C transaction as a B2C transaction can be taken to task for engaging in an unfair practice under the Consumer Protection (Fair Trading) Act.

Consumers who choose to purchase a used car via the C2C channel, including consignment cars, can refer to the Standard and Functional Evaluation checklist developed by the Consumers Association of Singapore on the checks that might be needed to assess the condition of the used car.