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by christay » Tue, 25 Dec 2012 11:03 am
Dear all,
any motor vehicle that is financed by a bona fide financial institution CANNOT be transfered without the loan being completely paid off.
When you buy the vehicle, assuming you take a loan, the bank will "tag" the car electronically with the LTA.
Only when the loan is cleared, the bank will "release" the tag, usually within 24-48 hours of the payment being cleared. If the loan is cleared with cash / cashiers order today, the bank will release the tag the following working day, and LTA will permit the transfer.
When selling a car to a dealer, its important to establish an understanding of the process that the dealer will go through.
Most reliable dealers will:
1) Pay you a deposit
2) Write to the bank to get the exact amount owing on a particular date
3) Show you the bank's reply (a dealer's calculation will not cut it)
4) Collect your car with the balance payment to you. They will also sign a collection slip so you are no longer liable for any traffic offenses from the time of handover.
5) Proceed to the bank to pay off the loan immediately
6) Wait for the car to be untagged and transfer immediately.
7) Send you a copy of the receipt of the loan being paid off.
8) Assist you in canceling your insurance.
Once transferred, you will receive a letter from the LTA stating the vehicle is no longer yours.
There have been known cases of rogue dealers who do not have the bankroll, who will pay you the deposit, take possession of the car, and try to find a buyer, collect a deposit from the buyer, then get a short term loan from some other party to clear the loan, transfer the car in, and out so as to minimise the interest cost for such a facility.
The above scenario is not common, but happens.
I can't think of an easy way out other than to engage a lawyer to try and "compel" the dealer to complete the transaction. In effect the dealer has not paid for the car, and therefore, has breached the standard terms of a sales and purchase agreement whereby the agreement is only valid as long as the item has been paid for.
There is a recent thread on a similar case on the my car forum, and it apparently took a long time to settle it.
In the meantime, your car is running around the island (or beyond) on your insurance policy as any insurance company will not cancel a policy without evidence that the car has been transferred. If the dealer lets your insurance and road tax lapse, as the car is still under your name, these two offenses will technically be your responsibility, at least till you can prove to the authorities that it was a rogue deal.
I would get a lawyer to handle this to for you immediately.
