The Consumer Association of Singapore (Case) is proposing an insurance scheme for the motor industry to protect car buyers against fraudulent dealers.

The consumer watchdog said that the scheme could work like the one for the spa industry, in which customers who buy a package provide details such as their identity card number to get a certificate of insurance on the spot. Insurance premiums are paid by spas, which have CaseTrust accreditation.

The Singapore Vehicle Traders Association, which has a joint CaseTrust accreditation scheme with Case, agrees that such a scheme could work for the motor industry.

Case had suggested the insurance scheme to safeguard car buyers' interest after a case involving dealer Volks Auto.

But there were mixed reactions about the proposed scheme from car dealers and consumers alike. For instance, some buyers are worried that costs are passed onto them. Car dealers, on the other hand, think the scheme may have limited effectiveness in weeding out rogue dealers.