Sambung Bayar Deal Is Legally Invalid - KPDN

Buying a car is no laughing matter. To begin with, there are an infinite number of documents that must be submitted. Aside from the lengthy and complicated process, loan ineligibility is another reason why people resort to sambung bayar. The deposit is usually less than what is required by the bank when making a legitimate purchase. The seller, on the other hand, does not have to go through the trouble of paying off the bank in order to sell it. However, there have been enough cases where the contract hasn't ended well for either the owner or the buyer.

That is why in Malaysia, sambung bayar agreements are illegal under Section 38 of the Hire Purchase Act of 1967 which states that the vehicle belongs to the bank until the loan is paid off, and no one else has the authority to sell or buy it. If they do, they face an RM30,000 fine or up to three years in prison. This was reiterated by the KPDN's director-general of enforcement, Datuk Azman Adam, who reminded the public that any contract signed for the purpose of continuing vehicle payments under a sambung bayar scheme is not legally valid, according to Sinar Harian. Azman explained that this did not preclude someone else from paying for and using the vehicle because an assignment of rights under a hire purchase agreement is permitted under Section 12 of the Hire Purchase Act 1967. However, it can only be done with the permission of the bank/financial institution. In such cases, if the lessee intends to transfer his rights to the vehicle under the Hire Purchase agreement, he or she must notify the bank/financial institution and seek permission and approval from the bank. "If the bank agrees, the hire purchase agreement in the lessee's name will not be terminated, but the bank will prepare a new 'assignment' document, which will be signed by the original lessee, the bank, and the party continuing payment for the vehicle, under the condition that the party continuing payment is not on the blacklist of financial institutions." "Throughout the assignment period, the original lessee's rights and liabilities will remain in effect," he said. Most sambung bayar cases, however, occur outside of the bank's knowledge, when the lessee negotiates directly with the pay-as-you-go party about his/her intention to sell the vehicle that is still subject to a hire purchase agreement

While it is difficult for financial institutions to track the vehicle if the pay-as-you-go party fails to pay the vehicle's monthly instalments, Azman stated that the lessee will bear the brunt of such behaviour, including legal action and blacklisting. So, as normal as it may appear with all of the WhatsApp groups, websites, and Facebook pages openly offering sambung bayar vehicles at attractive prices, keep in mind that they are illegal and can land you in a lot of trouble if something goes wrong. Source: Sinar Harian