Find & disqualified for illegal renting of private car

[Kezg1]

 

 

 

 

ELECTRIC NEWS

 

Firm helped pay car owner's monthly instalments for his vehicle

Fined for renting out car illegally

By Hedy Khoo

 

February 23, 2009

 

 

 

 

CAN'T afford to pay the monthly instalments on your car loan? Renting out your car might seem an attractive option. But beware.

 

 

QUIET: The office of Starzfocus Car Rental where Lawrence Yong rented out his car in return for it paying his monthly car instalments.

An owner handed over his car to a car rental company in return for the company paying his monthly instalments.

 

But what Lawrence Yong Shao Ping, 30, did not realise was that he did not have the required motor insurance for such a transaction.

 

He had to cough up a fine of $500 and was disqualified from driving for a year for renting out his car illegally.

 

He was caught when a hirer who took his car from the rental company was stopped at Ang Mo Kio in September 2007 by a Land Transport Authority officer.

 

In 2005, Yong had handed over his car, which he bought in 2004, to Starzfocus 2 Rental Enterprise in return for the rental company paying $800 for his monthly instalment.

 

Starzfocus then leased the car to one Mr Jeevan Shanmugam from September 2007.

 

Professional

 

According to court papers, Yong had been recommended to Starzfocus by a friend who told him that 'it was a reputable company'.

 

He also noticed that the company was 'well furnished and appeared to be run in a professional and experienced manner', and 'there were many cars on the premises'.

 

This gave him the 'confidence that he was dealing with professional, experienced and honest persons'.

 

Yong was introduced to a director of the company, Alan Goh, and told that the company would pay $800 for the car's monthly instalments.

 

In mitigation, Yong's counsel said his client thought the rental company was 'fully aware and conversant and in compliance with the laws, rules and regulations relating to the motor trade and motor rental business'.

 

The car company also informed him that it had its own insurance policy to cover the rental of vehicles.

 

He was shown the standard terms and conditions which a hirer would have to sign and told that the hirer could take out an insurance policy for the duration of the hire.

 

He was further assured that he could make a third party claim in the event his vehicle was involved in an accident involving other drivers.

 

His mitigation plea stated that Yong did not gain financially and continued to suffer a loss.

 

He was only trying to reduce his losses by renting out his car, instead of selling it.

 

Assured

 

While his car was with Starzfocus, the company had settled numerous traffic fines and even settled insurance claims from two major accidents the car was involved in without using Yong's insurance coverage.

 

This further convinced him that the company's assurances to him were true.

 

Yong claimed that he had been misled and was unaware that the rental arrangement was illegal until informed by the LTA.

 

District Judge Salina Ishak considered that ignorance of the law is no excuse, but said that companies which offer such services are 'very much prevalent and a growing phenomenon', such that they 'give credence that such practices are acceptable and legal'.

 

She pointed out that the rationale for the Motor Vehicles (Third Party Risks and Compensation) Act is to ensure that pedestrians and the motoring public will be able to recover compensation from an offender if he injures or kills someone.

 

As Yong's car was registered as a private vehicle, the insurance policy for the car would be for private use and not for reward or hire.

 

She noted that generally, private car owners are not permitted to rent out their vehicles unless they do so under the Private Car Rental Scheme introduced by the LTA.

 

)Under the scheme, private cars can be rented on weekends from Friday 7pm to the following Monday 7am. But owners have to ensure adequate insurance coverage for the period of rental.

 

The judge pointed out that as a car owner, Yong should have checked that his car was properly insured.

 

But he had chosen to 'turn a blind eye' and rely on the assurances made by the representatives of the rental company.

 

So the judge said Yong was 'not without blame but in fact is wholly to blame for his misfortune'.

 

He could have been fined up to $1,000 and jailed up to three months.

 

 

My question here is why was he being disqualified from driving

 

 

[Shull]

IMO, this is a case of the company misleading the car owner about LTA rules and regulation. LTA should shut this loophole once and for all.

Either

1) Totally forbid renting/hiring personal cars(as was the case before)

 

or

 

2) Lift the restrictions and allow renting/hiring of private cars but with proper insurance coverage for the period of rental. The current of Private Car Rental Scheme of allowing renting out on weekends isn't helping at all because it's the weekends when families need the car.

 

I'm more for the 2nd option because it gives more people the flexibility of using a car without owning one, and thus reducing the number of cars on the road. While at the same time, owners have an option to generate a passive income to at least cover their monthly installment rather than let the car rot somewhere and depreciate when not in use.

Edited February 23, 2009 by Shull

[Stary]

How come the LTA so chun pick the correct car?

[Blackyv]

IMO, this is a case of the company misleading the car owner about LTA rules and regulation. LTA should shut this loophole once and for all.

Either

1) Totally forbid renting/hiring personal cars(as was the case before)

 

or

 

2) Lift the restrictions and allow renting/hiring of private cars but with proper insurance coverage for the period of rental. The current of Private Car Rental Scheme of allowing renting out on weekends isn't helping at all because it's the weekends when families need the car.

 

I'm more for the 2nd option because it gives more people the flexibility of using a car without owning one, and thus reducing the number of cars on the road. While at the same time, owners have an option to generate a passive income to at least cover their monthly installment rather than let the car rot somewhere and depreciate when not in use.

 

agree with ur #2 and in current situation, this will definitely helps some car owner to pull thru' instead of pushing them to dire straits..

i simply cannot understand why it's not feasible to change to rules since it can really create a win-win to those who has sudden financial difficulty and those who need to rent a car for short term use but do not want long term commitment....

[Albeniz]

Yeah... the #2 option sounds good.

[Thespark]

It seems that there are quite a number of car rental companies doing that. judging from the ads online looking for cars to take over installemts.

[Ultramega]

IMO, this is a case of the company misleading the car owner about LTA rules and regulation. LTA should shut this loophole once and for all.

Either

1) Totally forbid renting/hiring personal cars(as was the case before)

 

or

 

2) Lift the restrictions and allow renting/hiring of private cars but with proper insurance coverage for the period of rental. The current of Private Car Rental Scheme of allowing renting out on weekends isn't helping at all because it's the weekends when families need the car.

 

I'm more for the 2nd option because it gives more people the flexibility of using a car without owning one, and thus reducing the number of cars on the road. While at the same time, owners have an option to generate a passive income to at least cover their monthly installment rather than let the car rot somewhere and depreciate when not in use.

 

Option 2 contridicts with the OPC scheme. If only need the car on weekends then why buy a normal plate car in the first place? Can buy a OPC or just rent a car.

 

On the other hand, the current Private Car Rental Scheme which allows renting car out on weekends works in tandem with the OPC scheme. It's for people who don't need car on weekends.

 

In short:

1) if need car everyday, buy normal plate car.

1) if need car on weekends only, buy OPC or rent.

2) if need car on weekdays only, buy normal plate car and make use of Private Car Rental Scheme.

[Nhyone]

I'm more for the 2nd option because it gives more people the flexibility of using a car without owning one, and thus reducing the number of cars on the road. While at the same time, owners have an option to generate a passive income to at least cover their monthly installment rather than let the car rot somewhere and depreciate when not in use.

It's clear that LTA doesn't want us to generate income from our cars.

 

I wonder those cars "rented" out as wedding cars, are they legit?

[Ev0lutionz]

My friend encountered a rental guy. When he rented, the guy said. If tio anything, said borrowed car and stuff. I know straightaway its private car rental liao but make it nice say borrow. Who will know about the financial transactions under the table?

[Shull]

It's clear that LTA doesn't want us to generate income from our cars.

 

I wonder those cars "rented" out as wedding cars, are they legit?

 

the thing is..most of the peeps who rent out private cars are forced by circumstances and the 'income' is barely covering their monthly installment..

Edited February 23, 2009 by Shull

[Donut]

the current insurance policy is that no private rental/hire is allowed.

 

this kind of condition can be amended.... its just whether they want to amend only or not.....

 

if the car owner wants to rent out, the insurance companies can offer extra coverage for a nominal sum of premium.

 

and this 'extra premium' can be made payable on monthly basis or quaterly or yearly basis; just like those travel insurance or term insurance.

 

 

I'm sure car owners dun mind paying this extra premium so that they can rent out.

 

 

Bloody hell, LTA knows alot of car owners are having problems and they are not doing anything to help.... just know to fine the owners.

 

And how much are we paying our transport minister's salary?

 

 

[Kezg1]

 

 

 

Below $2millions.....for pay only hor....others not icluded