It’s well-known that automobile pawning, or sambung bayar, through which somebody pays month-to-month instalments to “personal” a automobile that legally doesn’t belong to them, has been round for an extended whereas. It’s normally employed as a manner out for automobile homeowners unable to pay their month-to-month instalments to the financial institution, with fee for the automobile being continued by a brand new guardian of the automobile, who successfully leases the automobile with out proudly owning it.
Sounds easy sufficient, however in follow there have been sufficient instances the place the contract hasn’t led to nice style, both for the proprietor or the “purchaser.” Extra importantly, the very act of pawning a automobile is unlawful.
This was reiterated by the ministry of home commerce and price of dwelling’s (KPDN) director-general of enforcement, Datuk Azman Adam, who reminded the general public that any contract signed for the aim of continuous automobile funds below a sambung bayar scheme is just not legally legitimate.
He mentioned that below the rent buy settlement signed between the proprietor (on this case, financial institution or monetary establishment from which the HP mortgage was secured) and the lessee, there’s a situation that states the lessee can’t ‘promote’ the automobile with out the proprietor’s permission. Doing in any other case is an offense to defraud the proprietor below the Rent Buy Act 1967.
Azman mentioned that this didn’t imply that another person can’t pay for the automobile and use it, as an project of rights below a rent buy settlement is permitted below Part 12 of the Rent Buy Act 1967. Nevertheless, it could possibly solely be carried out with the financial institution/monetary establishment’s permission.
In such instances, if the lessee intends at hand over his rights over the automobile below the HP settlement, the lessee should inform the financial institution/monetary establishment of his intention and search to acquire the financial institution’s permission and approval.
“If the financial institution agrees, the rent buy settlement within the identify of the lessee is not going to be terminated, however a brand new ‘project’ doc will probably be ready by the financial institution, and this will probably be signed by the unique lessee, the financial institution in addition to the social gathering persevering with fee for the automobile, below the situation that the social gathering persevering with the fee is just not on the blacklist of economic establishments. The rights and liabilities of the unique lessee will proceed to be in impact all through the project interval,” he mentioned.
Nevertheless, Azman mentioned this was not the case with the vast majority of sambung bayar instances, with the exercise occurring exterior the data of the financial institution. In such eventualities, the lessee negotiates instantly with the pay-as-you-go social gathering about his intention to ‘promote’ the automobile that’s nonetheless topic to a rent buy settlement.
“The pay-as-you-go social gathering solely wants to offer a small advance fee and proceed the month-to-month installment fee to the financial institution on behalf of the lessee. Usually, the settlement between the lessee and the brand new social gathering will probably be signed through a written contract or generally, simply by a handshake,” he defined.
He mentioned such instances proceed to propagate as a result of it was a simple manner out for each side – lessees unable to pay the month-to-month installments have a fast resolution to proceed fee, whereas these finishing up the sambung bayar course of are normally these dealing with difficulties in acquiring automobile loans or are blacklisted by monetary establishments. Moreover, the straightforward strategy of securing a automobile and never having to place down a big chunk of cash for it makes it tempting for these searching for a simple deal.
Azman mentioned that whereas it’s troublesome for monetary establishments to trace the automobile if the pay-as-you-go social gathering fails to pay the automobile’s month-to-month installments, the lessee is the one that may bear the burden of such behaviour, together with authorized motion and being blacklisted.
“As well as, a lessee who’s discovered to have bought his automobile whereas the rent buy settlement remains to be in place may very well be sentenced to a high-quality of as much as RM30,000 or three years in jail, or each, below Part 38 of the Rent Buy Act 1967,” he mentioned, including that lessees additionally run the danger of receiving a summons for site visitors offences that he didn’t commit. As for these persevering with the mortgage, the automobile isn’t yours, and it by no means will probably be.
Prefer it has been prior to now, our recommendation to these considering of pawning their automobiles or “proudly owning” a elaborate experience below a sambung bayar scheme stays the identical – don’t do it. It’s unlawful and never well worth the problem, even when it seems like a simple snip at first look.
