What is hire purchase agreement
A hire purchase (HP) agreement is one of the most common ways for people to buy private vehicles. If you take on a HP agreement, you become the hirer while the company financing the vehicle is the owner. As the hirer, you will have to pay instalments to the financier based on an agreed duration while you will have possession of the vehicle.
Who can repossess?
Normally a banking institution will engage a registered repossessor to repossess any motor vehicle. The reposseser must show his identity card (IC), authority card and repossession order issued by the banking institution before taking any action. Once he has repossessed the vehicle, the repossessor must immediately make a police report and bring the repossessed vehicle to the place indicated by the banking institution concerned.
How does repossession work?
1. Before your banking institution can repossess the motor vehicle hired to you, your banking institution will need to serve you with a Fourth Schedule notice which is a notice in writing of the banking institution’s intention to repossess the motor vehicle.
2. This notice will expire in 21 days. You will receive a second notice 14 days after the Fourth Schedule is issued as a reminder that your motor vehicle will be repossessed upon expiry of the Fourth Schedule. You can avoid this by choosing to pay the outstanding arrears as stated in the Fourth Schedule before the 21-days notice expires or return the motor vehicle to the banking institution before expiry.
3. You will need to settle any outstanding debts less the value of the motor vehicle.
What happens after repossession?
The banking institution will issue you and every guarantor a Fifth Schedule notice within 21 days after repossession. You can ask the banking institution to return the motor vehicle to you by:
* Paying all outstanding arrears and out of pocket expenses incurred by the banking institution; or
* Paying in full, the balance due and settling all out of pocket expenses
You can also introduce a buyer to purchase the motor vehicle at the price indicated on the notice.
If you or your guarantor does not settle the outstanding amount within 21 days of the issued Fifth
Schedule notice, the banking institution will sell your motor vehicle by public auction or give you the option to purchase the motor vehicle at a price lower than the estimated price stated in the Fifth Schedule.http://www.bankinginfo.com.my/02_know_y ... &#content4