Rising Complaints About Car Dealership Warranty Disputes in Singapore: What You Need to Know!

SINGAPORE - A troubling trend is emerging in Singapore as the number of complaints regarding vehicle warranty claims is on the upswing. In 2023, the Consumers Association of Singapore (Case) received 11 complaints, a jump from seven in 2022 and six in 2021. Alarmingly, in just the first eight months of 2024, the consumer watchdog has logged six more complaints related to car dealers refusing warranty claims.

These complaints come on the heels of a warning issued by the Competition and Consumer Commission of Singapore (CCCS) in February, urging car dealers to stop enforcing warranty restrictions that deter owners from servicing their vehicles at independent or third-party workshops. Such restrictions often require customers to have their cars serviced solely at authorized dealers, or risk voiding the warranty.

In 2024, the CCCS reached out to 26 authorized car dealers to address concerns regarding these warranty restrictions, affecting both mass-market and luxury car brands. A spokesperson for the CCCS indicated that dealers must promptly remove any of these restrictive policies from their websites, as they may violate the Competition Act.

New vehicle warranties usually last three to five years and cover repairs for defective parts and poor workmanship. However, a significant change in warranty terms has been noted since a market inquiry in 2017, which led major dealerships to impose tougher restrictions. These past limitations often gave dealerships the power to void warranties if cars were serviced externally.

Market feedback revealed a stark contrast in pricing, with authorized workshops charging "two to three times" more than independent entities for similar services. While complaints about warranty restrictions had decreased over the years, the CCCS continues to monitor the situation closely, particularly with the rise of electric vehicles and the increasing complexity of modern cars. Concerns remain that independent workshops may have trouble acquiring the specialized tools and software needed to service these newer models.

Dealers, when approached, asserted that their customers could utilize third-party workshops without impacting their warranty, provided that maintenance records are properly kept and genuine parts are used. However, unauthorized modifications or failure to document work done can be grounds for warranty voidance.

The battle for third-party workshops to compete against authorized dealers remains an uphill struggle. Mr. Amos Mok, manager at Juzz for Cars—a third-party workshop specializing in BMW and Mini—pointed out that many customers still believe that only authorized dealerships possess the necessary expertise to service new cars.

Moreover, Mr. Eric Goh, co-founder of Motor Edgevantage, echoed these sentiments by highlighting the difficulties in accessing proprietary equipment and software required for diagnostics in certain vehicles.

Adding fuel to the fire, Mr. Francis Lim, president of the Singapore Motor Workshop Association, has observed that authorized dealerships are extending warranty periods for new cars—some offering five-year warranties with no mileage caps. He interprets this as a strategy to retain customers longer and discourage them from seeking third-party services.

"The logic is clear: if a consumer enjoys free routine servicing on a car under warranty, why would they look elsewhere?" he questioned.

As consumers, it’s crucial to be aware of your rights regarding vehicle warranties. Understanding that you can still maintain your warranty by choosing independent workshops may save you time and significant costs. Stay informed and be vigilant, as it seems the landscape of car servicing is shifting rapidly!