The Ministry of Domestic Trade and Consumer Affairs (KPDN) has made it clear once again that vehicle pawning or more commonly known as ‘sambung bayar’ are invalid and illegal.
Its director-general of enforcement, Datuk Azman Adam, has once again stated that contracts produced to ‘sambung bayar’ a vehicle are invalid and definitely illegal.
Why? Any active hire purchase agreement means that the real owner is either the bank or financial institution. The car owner or lessee is not allowed to sell the vehicle without the owner’s permission because if you’re caught doing so, it’s considered fraud.
A non-official agreement or ‘handshake’ agreement for ‘sambung bayar’ cases between the lessee and a third party is not valid particularly because the real owner of the vehicle (banks or financial institutions) was not informed (and did not grant permission) regarding the vehicle ‘handover’ to a third party.
Despite the risks, the ‘sambung bayar’ method seems to gain in popularity because it allows those who have been blacklisted from banks or financial institutions the ‘opportunity’ to ‘purchase’ a car from the lessee and just continue the loan repayments for them.
Azman did, however, clarify that this can be done in a proper way via an assignment of rights within the hire purchase agreement BUT you’ll need permission from the bank or financial institution that granted the hire purchase agreement in the first place.
In other words, it’s not worth the multitude of risks and headaches when it comes to unofficial and invalid ‘sambung bayar’ with issues like the third party not making the loan repayments, getting traffic summonses, and other legality matters with the banks and financial institutions if caught, especially if you’re the lessee.