Hire Purchase Act 1967 (Amendment 2010)

Selling Used Car

The HPI (Hire-Purchase Inspection), also known as the B7 inspection, took effect on June 15, 2011 as part of amendments to the Hire-Purchase Act 1967. The amended Act makes it compulsory for owners of used vehicles to get their vehicles to undergo a comprehensive 18-point inspection before sellers can enter into a hire-purchase agreement.

Used vehicle sellers will have to pay a RM90 inspection fee to Puspakom before the sale can be made, in line with the implementation of Hire Purchase Act (Amendment 2010) on June 15, 2011.

Puspakom will issue a certificate to indicate that the car can be used for ownership transfer and hire purchase agreement with banks. Cars sold to second-hand dealers must be temporarily transferred to the dealers' name in a move to protect the interest of all parties involved in the transaction.

Dealers and sellers can choose to cancel the transaction immediately if they discover a problem with the car. Dealer is made the temporary owner of the car. Thus, the car seller and buyer need not worry about being punished for offences that they did not commit. Temporary ownership would not be recorded in the vehicle's registration card.

Car dealer is given six months to find new buyers. If they fail to sell the cars by then, the car ownership needs to be transferred permanently to the used-car company.

Sellers may request a 10% deposit from buyers as required under the Hire Purchase Act.

Car owners, not car dealers, will bear the costs of Puspakom's Transfer of Ownership (B5) and Hire-Purchase (B7) inspections - The Federation of Motor and Credit Companies Associations of Malaysia (FMCCAM)

Repossession

To protect the interest of consumers. Only those registered and given permits by the ministry will be appointed vehicle repossessors.

Repossession can only be done from 9am to 9pm daily. No force must be used in the process. If the vehicle is in the garage, they can't enter the house compound except with a court order and can be reported to police for flouting it.

Used motorcycles were exempted from inspection due to the small number and amount involved.

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