Not many people in Singapore are all that aware of how to
de-register a vehicle, a task usually left to car agents.
De-registration is the process of taking a car off the road, by
either scrapping it for its metal, or applying for it to be shipped
to another country.
But, as one car owner found out recently, the de-registration
scheme can be illegally circumvented by individuals out to make a
quick buck.
Last month, Mr John Lim (not his real name) wanted to de-register
his 14-year-old car a year before its certificate of entitlement
(COE) was due to expire. He also had his eye on a new model, but
soon realised that he did not have the cash to buy the new
car.
When he explained his predicament to the car agent, Mr Lim was
surprised that the agent had a solution.
Said Mr Lim, who needed $6,000 to pay off the loan on his
14-year-old car, which had a renewed COE: "When I told my agent the
problem, he said he could help me by selling the car in
Malaysia.
"He took down all the information about my old car, such as the
date of manufacture and colour, and told me he would revert to me
in a day or two."
Three days later, the agent called Mr Lim and told him someone in
Malaysia would be interested in buying his car at the right
price.
A few days later, Mr Lim and his agent drove the car to Johor Bahru
and met the Malaysian car agent at a resale car mart near Taman
Sentosa.
"I left the car there and returned with (my agent) in his car. He
told me that he would settle everything with regards to
de-registering the car.
"But, I noticed that when he left my car in Malaysia, he removed
the road tax disc from the car."
The next day, the car dealer completed the prescribed form and the
car was deregistered with the Land Transport Authority (LTA)
through the appointed scrap yard. A few days later, the agent paid
Mr Lim.
And Mr Lim is not alone.
A 45-year-old primary school teacher who declined to be named said
he was made a similar offer by his resale car agent.
"It was a perfect solution. I needed the money to pay off my loan
and wanted to buy a new car. But, I did not have much cash to pay
off my loan," he said. "But, my car dealer said that he could sell
my car in Malaysia and that solved all my problems. I assumed that
everything was above board."
Several resale car agents and industry watchers Today spoke to say
that this practice has been going on for quite some time.
When an owner de-registers a car, all he has to produce to the LTA
is a form, stamped by a scrap yard operator to prove that the car
has been sold off as scrap.
According to the LTA website, there are five appointed scrap yards
in Singapore.
Officials at two of the scrap yards Today spoke to admitted they
were aware that cars meant to be scrapped were being sold in
Malaysia.
And several agents Today spoke to, who have been taking resale cars
across to Malaysia, said that they have "been getting help" from
the scrap yard operators, allowing them to certify that a car has
been scrapped.
While they declined to go into details, industry sources told Today
that scrap yard operators are paid a commission to "de-register"
cars to be sold in Malaysia.
According to another car agent who has been exporting cars to
Malaysia in this manner, the transaction is a "matter of trust"
between the agents and the scrap yard operators.
He said: "The scrap yards know what we are doing, and so far,
everything has been okay. This is just one way for us to make some
extra money, especially now that the resale car market is so
bad."
A short trip across the causeway proved there is indeed a demand
for cars from Singapore.
Three resale car agents in Johor Bahru admitted they had bought
Singapore-registered cars from resale agents in Singapore.
But they claimed that they were not aware that the cars were
possibly being brought into Malaysia without the necessary
paperwork.
They also claimed that they were only making the purchases for
their friends in other parts of Malaysia.
Said an agent, who runs a business near Johor Bahru's Taman
Petaling: "Sometimes we get calls from Kuala Lumpur or Seremban
from other agents.
"They may ask for a particular model. The Proton Wira and Toyota
Camry are most in demand.
"Most cars which are available in Singapore are also available in
Malaysia and there is not much variation to the cars. A Mercedes
Benz 200 in Singapore is exactly the same as a Mercedes Benz 200 in
Malaysia.
"So, my job is just to ask my car agent friends in Singapore
whether a particular model is available. If it is, then we agree on
a price and they bring it here."
He said that owners whose vehicles have been destroyed in accidents
usually buy cars in this way.
He explained: "They claim the insurance for the car which could
be up to $40,000 and then they spend just $4,000 to $5,000 to
purchase a used car from Singapore of the same model as the one
which has been damaged.
"They then refurbish the car and change the chassis number and,
when it is ready, they just use the Malaysian road tax disc. No one
can spot the difference and, in the end, it is the insurance
company which loses out."
In response to queries from Today, an LTA spokesman said that the
matter was being investigated and that the LTA "constantly monitors
the procedures for the de-registration of vehicles to ensure that
the process is efficient", adding that "we will make changes to it
as and when necessary".
It said that anyone who makes a false declaration in relation to
such applications could be prosecuted under Section 129(1)(a) of
the Road Traffic Act, where he could face a fine not exceeding
$5,000, imprisonment for a term not exceeding 12 months, or both.-
TODAY