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Used cars are protected on paper by lemon law, but just how useful is that in the real world against hefty repairs? Should all used cars come with warranty?
Category: Car Buying Advice
With COE premiums skyrocketing in recent months (at time of writing, the gap between the premium for small and big cars is now the widest ever at $20,000, while premiums for big cars crossed $70,000 to reach a six-year high), you might want to consider a used car instead of new if you're after your next set of wheels.
That's because purchasing a used car usually means you are paying much less as compared to a newer version of the same model. And at the same time, a used car usually depreciates less as the first owner has already absorbed most of the loss.
The downside is that most used cars older than three years are no longer covered by manufacturer's warranty. So, buying a used car is always a gamble and as Murphy's law goes, anything that can go wrong will go wrong.
That, however, doesn't mean it's the end of the world if your new-to-you used car breaks down or throws a check light.
If you've bought it from a used car dealer and a new defect is found within six months since the date of purchase, you are covered under the lemon law. Well, somewhat…
How well are you protected?
Like all warranties, the lemon law covers defects big or small that weren't highlighted at the time of purchase. It does not include wear and tear items from normal use and exposure.
For the law to be effective, you should have an evaluation checklist completed before purchase, and have the necessary information or findings documented in the sales agreement.
The Lemon Law, however, does not cover consumer-to-consumer transactions. This means that if you're buying from a direct owner, or a consignment dealer, which a lot of people do, you will not be covered.
To circumvent the lemon law, some used car dealers pose as direct owners or consignment dealers so that's something else to check for before you buy.
While looking good on paper, making a claim under the lemon law is also not always the quickest, easiest process and often ends up in a long-drawn-out dispute between the dealer and customer. A 2018 Straits Times report found that about a quarter of lemon law cases could not be resolved by CASE and had to be filed with the Small Claims Tribunals.