HP Life, offered by the bank, is an insurance plan to pay off the remaining loan in event of the owner's death or Permanent disability. The ownership of the car will then be passed on to the next of kin /beneficiary named in the policy.

Yes, on one hand, it protects the bank's interest, but on the other, it also helps the next of kin, who needs the car as a mode of transport. Would strongly advice to take it, if the car is a family car, often shared by the spouse and/or the spouse stands as a guarantor for the loan.

Because in event of the owners' death/permanent disability, the guarantor is liable to settle the loan anyway and such a protection would be a welcome relief.

or you can let the bank repossess the car; why pay to cover the banks potential losses since car value depreciates unlike a property

do all HP loans require guarantors?

Yes, you are right, the bank can always repossess the car. However, if any family member eg spouse had stood as a guarantor, the bank would first demand that the guarantor continues to service the loan. If the guarantor fails to do so, the car would be auctioned off, and if there is any shortfall in the auction price and balance loan settlement, the guarantor would be responsible for it. The last thing for someone who had lost their love one ever wanted, is to also bear the consequences of the deceased liabilities, house, cars etc... Not taking responsibility of it could also affect the credit worthiness of the guarantor, because after all, life has to go on....

Permanent disability is a generous term. It only covers very very few examples of permanent disability. Some don't even cover blindness or lost of 1 limb. For that amount of insurance money, It is hard to argue that the money is worth the risk involved, unless the borrower is very old.

I think a guarantor is required if the applicant has no credit history, just started working or zero track record or has never been issued a primary credit card before.

With that information, the insurance money is almost like a scam really. No matter how hard someone argues, auto loan insurance is NOT WORTH the money paid.

This post has been edited by ru40342: Sep 14 2020, 02:07 PM

Yup. agree

I'm looking for quotation loan 150k; can share contact please?

To each, his own then, depending on your situation i.e single or married / loan with guarantor or without/ young or old/sharing car or not. I have personally had a customer who, after her husband had passed on, contacted me to check if they have bought any HP auto life, or she would loose the car she needs to the bank.

Sometimes, guarantor is required as joint-income with the borrower, due to high commitment or insufficient income. Other times , the bank need it as the applicant is only border-line in the scoring, (eg due to not so "impressive" repayment record) and a guarantor would increase the bank confidence in granting the loan.

I can understand the situation but the thing is that the ratio of the insurance premium to loan amount and the coverage + unable to reclaim the insurance money if no claim is made after the loan payment period = waste of money.

I am not saying it is useless. I am saying the coverage and the insurance premium is unreasonable and it makes much more financial sense to avoid it.

This post has been edited by ru40342: Sep 14 2020, 05:43 PM

Hi guys, a quick question although I'm not sure this is the right topic to ask

Got my loan approved and was given the LOU which stated the net invoice price is 36000. My loan with the bank is 31000, does that mean I have to pay 5000 as down payment?

Thanks in advance

That's just for paper work. Do consult your SA . If he had committed an OTR price to you, then that price should apply and not anything more.

Thanks for the reply bro. But yea was just curious why the OTR price promised by my SA is different from the LOU.
Isn't familiar with buying car and didn't but want follow everything blindly hence wanna ask around.
But anyway thanks again, really appreciate it.
Cheers

interesting

i got 3.57% for 53k 9 years cimb
3.76% for 47k 7 years pbb

2014 used car

btw wanna ask bankers here is it possible to change car model and dealer ? the car is same year and price.just model differ

This post has been edited by pejakb: Sep 24 2020, 03:29 PM

Hint : Bank Negara ruling, maximum financing by all banks for auto loan shall be NOT more than 90% of the OTR selling price

Each car has its own valuation of market value, hence banks would only finance based on that market value. When you change to a different model, the valuation of that model changes . If you change from a lower to higher valued model (eg cold model to a popular & highly in demand model), chances are banks can grant you the same loan amount and condition. Unfortunately, the reverse also can happen when you choose a less popular model.

If you plan to change dealer, it might as well be a fresh loan application, because banks usually work with their panel used-car dealer only. If both dealers share the same bank as panel, then no problem.

3.01% 34K 5 years Axia

2.3% for 9 years loan. Toyota recon/used 2015.

Is it true that bank will default spouse as first guarantor if you are married?