Please Do NOT Buy A Sambung Bayar Car Tomorrow

If You Buying A Used Car Sambung Bayar Then You Cant Afford It

WE often receive questions is it worth buying or selling a car ‘sambung bayar’ which means to continue paying the existing car installments without legally owning the car? 

What is the risk? Well ….. remember a year ago on social media a family went viral vandalising a Honda City that the bank repossession agent/towing agent wanted to take away their car. 

Based on social media information, the car was actually purchased on a ‘sambung bayar’ payment plan and had to be repossessed because the original car owner had high amount of ‘hutang’ in his car finance installments ….. which was a total of eight months. 

According to sources, the car had originally been hooked up to a tow truck, but the current ‘sambung bayar’ owner rammed the car down into the garage of his home until the bumper cracked open and then the car was damaged by the ‘sambung bayar’ owners using wood and metal objects. 

Was It An Illegal Sale Despite An Agreement?  

FACT! Any purchase agreement without bank knowledge is invalid in court. So the original owner remains responsible for the bank installments and traffic fines on the car. 

If you’re planning on buying a car using ‘sambung bayar’ which a lot of lower income Malaysians do ….. we advice strongly NOT! Why? Here’s a list of risks you could face.

 1. The Money Has Been Given, But The Original Owner Does Not Pay The Bank Installment. This is the same case as this shared news. It is said that the money has been given to the original owner, but unfortunately the money was not used to pay bank installments. No need to wait up to eight months, the bank will actually send a warning notice (to the registered address) if the owner fails to pay the instalment in just two consecutive months they will be given a period of 21 days to explain the arrears. At the end of 21 days, and after 14 days, only then banks will appoint car re possessors to locate and tow away the car.

 2. Original Owner Died. Imagine the original owner of the car dies, then the owner’s heirs have the right to ask you to return the car even though there is an signed agreement. Heirs don’t care who you are because your signed agreement/deal is invalid in court. 

 3. Cannot Change The Name. Say you are done arranging installments either straight to the bank, third party or original owner, are you sure the title of car ownership will change to you? What if the original owner wanted to take back his car? Like it or not ….. you will have to hand the car back. Remember, an agreement between you and the original owner is invalid without the knowledge of the bank. 

 4. Cars That Can’t Be Sold To Others. As long as the name in the car grant (registration card) doesn’t change, you cannot sell the car to someone else even if the debt is settled. The title change process requires having your car inspected at Puspakom before changing the name at JPJ. For the process of changing the name, the original owner needs to come personally to JPJ. What if the original car owner has died? The answer is, use the car until the end of time. Even if no relative comes to claim.

 5. No Insurance Claims. When there is a ‘total lost‘ accident, the cost of compensation will be given directly to the original owner of the car. Meanwhile, yourself who has been paying the monthly installments will NOT receive any compensation. It is almost like renting the car!

 6. Risk of Accused of Stolen Car. There is also a possibility that you will be suspected of being a thief if the original owner reports the police who claim his car was stolen. You might show the agreement letter supposedly signed. Unfortunately, that might not be the actual signature of the original owner. 

7. Remember, A Letter of Agreement Is NOT A Sale Agreement! Once again a reminder, even if there is an agreement between you and the original owner of the car, it is STILL not sold. The original owner maintains absolute ownership over his car, and at any time he could ask for the car back.