Lease of your worries

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Lease of your worries

Postby admin » Wed Aug 06, 2008 3:19 am

Leasing out your car may be an attractive option in these difficult times but beware the consequences if you are caught, warns PRASANNA RAMAN.

ALFRED, 29, commutes using public transport daily. It’s something that he’s getting used to. Not that this young executive doesn’t own a car. Nor is it his way of cutting costs with the recent hike in fuel prices.

The car isn’t just sitting idle in his porch either. His one-year-old Toyota Vios is actually on a temporary “loan” to a car rental company.

“They’ve promised to pay my monthly car instalments as well as maintain it. I can’t think of a better way to avoid my car from being repossessed by the bank as I’m facing difficulties paying my instalments now,” said the sales executive.

Alfred, who bought a double-storey house in Selayang recently, finds that paying the instalments for both house and car has become a burden.
Cash-strapped Alfred is among a small number of Malaysians who lease out their cars on a short-term basis to cope with financial constraints.

It’s not just the young executives who lease out their cars, according to Raju, a car rental company owner.

“We have higher-end cars such as Mercedes Benz as well as multi-purpose vehicles such as Toyota Estima and Hyundai Trajet which we lease from businessmen.

“Also favoured are Proton Perdanas and Wiras, mainly because they’re cheaper to lease.

“The people whose cars we lease from are obviously in some financial difficulties. So when we approach them with this option, they take it up.

“With more than one vehicle at home, they find this an ideal solution to their car instalment woes,” said Raju, who is convinced that the deal is a win-win situation.

Raju, who has been in the car rental business for over eight years, said only cars that were below two years were accepted for lease.

Our clients are expatriates and businessmen on trips here. They use the cars for one or two months and sometimes even longer according to the contracts,” he said.

He pays between RM2,700 and RM3,000 a month for a Mercedes Benz E Class while a Proton Perdana fetches anywhere between RM1,400 and RM2,000 per month for the owner.

Raju relies on his network of friends and associates to spread the word around.

However, he’s quick to add that it is only when there is a demand for a certain make that he contacts the owner for the vehicle.

A glance at the classifieds of the main dailies shows that leases range anywhere between six months and a year.

Although it’s public knowledge that one can’t lease out one’s privately-owned car for “commercial” use, many people still do it as it’s the best option to avoid repossession.

A spokesman from the Road Transport Department cautioned car owners that they risk losing their cars if they’re caught leasing them out for commercial use.

“It’s definitely illegal. You’d have to have a Hire and Drive licence if you want to lease your car for hire. This is what licensed car rental companies have for their own fleet of cars,” said the spokesman.

Should the RTD receive a complaint or a tip-off that a particular individual is leasing out his or her car, the department will send a snoop team to locate the whereabouts of the car.

Upon completing the investigation, RTD will take the case to court.

Read the full article:
http://www.nst.com.my/Current_News/NST/ ... ndexF_html
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