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Buy-and-rent car scheme is illegal: LTA

The Straits Times - August 2010  By Jessica Lim

THE Land Transport Authority (LTA) has flagged as illegal a scheme used by Fiat's sole distributor here to drum up sales.

It is not only the company which has run afoul of the law, but also some 50-odd car owners who have been attracted to TTS Eurocars' buy-and-rent scheme.

The carrot to prospective buyers is that in return for making a new purchase, those burdened by existing car loans can rent out their existing cars through the firm's leasing arm to earn an income and thus pay off the loan.

... In a statement to The Straits Times last week, LTA said that the scheme ran afoul of its rules. "Private car owners are not allowed to rent out their cars through rental companies," said an LTA spokesman, adding that this was illegal for both the car owner and the company which allowed the use of private cars without proper insurance coverage.

... President of the Vehicle Rental Association Peter Cheong said that for a car to be rented out legally it has to be insured and registered with the LTA as such. The association, he said, has received feedback about TTS Eurocars' scheme.