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 Hire Purchase Act, Particular to the 2011 amendment

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TSdares
post May 17 2016, 10:36 AM, updated 8y ago

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While reading the Honda Civic X thread, I touched upon the HPA briefly but I think most are ignorant about the laws protecting them as consumers when buying new cars, so I would like to share what I know about it and the source of my info. Please correct me if I got anything wrong.
  • Dealers are only allowed to accept a maximum of 1% of the car's price as booking fee, eg. For a RM150k car, the dealer cannot accept more than RM1.5k as booking fee. They can accept less than 1%, of course.
  • Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.
  • Upon cancellation of the booking NO MATTER THE REASON, the dealer must refund to you a minimum of 90% of your booking. If you paid RM 1k as booking, then the dealer must refund to you a minimum of RM900. There is no such thing as "We'll only refund you if your loan x approve..."
  • The remaining 9% for the downpayment is only paid upon signing the hire purchase agreement. In the HP agreement there must be the chassis number of the vehicle allocated to
    you. You are advised to duly request that the dealer furnish you with a chassis number before agreeing to sign anything.
  • If the dealer say "we'll only order your vehicle after you paid the booking/signed the HP agreement..." look for another dealer. They are not even suppose to accept booking fees for cars that are not yet in their stockyard.
sos 1
sos 2

Again, feel free to correct me if I am wrong on any of the above points or if I missed anything.

This post has been edited by dares: May 17 2016, 10:41 AM
TOMEI-R
post May 17 2016, 10:52 AM

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QUOTE(dares @ May 17 2016, 10:36 AM)
While reading the Honda Civic X thread, I touched upon the HPA briefly but I think most are ignorant about the laws protecting them as consumers when buying new cars, so I would like to share what I know about it and the source of my info. Please correct me if I got anything wrong.


  • Dealers are only allowed to accept a maximum of 1% of the car's price as booking fee, eg. For a RM150k car, the dealer cannot accept more than RM1.5k as booking fee. They can accept less than 1%, of course.

  • Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.

  • Upon cancellation of the booking  NO MATTER THE REASON, the dealer must refund to you a minimum of 90% of your booking. If you paid RM 1k as booking, then the dealer must refund to you a minimum of RM900. There is no such thing as "We'll only refund you if your loan x approve..."

  • The remaining 9% for the downpayment is only paid upon signing the hire purchase agreement. In the HP agreement there must be the chassis number of the vehicle allocated to
    you. You are advised to duly request that the dealer furnish you with a chassis number before agreeing to sign anything.

  • If the dealer say "we'll only order your vehicle after you paid the booking/signed the HP agreement..." look for another dealer. They are not even suppose to accept booking fees for cars that are not yet in their stockyard.

sos 1
sos 2

Again, feel free to correct me if I am wrong on any of the above points or if I missed anything.
*
[*]Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.

You can pay the booking fees to secure yourself a unit of the car you wanted. Without a booking, how can the dealer reserve a unit of the vehicle you want for you? Again, Booking fees are paid when you want to "make a booking" for the car. You pay the Full Downpayment After your Loan is APPROVED. Downpayment is the amount to be paid for the Selling price of the car less the loan you applied for in the bank.

This post has been edited by TOMEI-R: May 17 2016, 10:52 AM
loui
post May 17 2016, 11:04 AM

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QUOTE(TOMEI-R @ May 17 2016, 10:52 AM)
[*]Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.

You can pay the booking fees to secure yourself a unit of the car you wanted. Without a booking, how can the dealer reserve a unit of the vehicle you want for you? Again, Booking fees are paid when you want to "make a booking" for the car. You pay the Full Downpayment After your Loan is APPROVED. Downpayment is the amount to be paid for the Selling price of the car less the loan you applied for in the bank.
*
Attached Image

the act clearly spell out the amount you can ask for booking fee

my understanding is that, the act act as a protection for the consumer

the act is trying to prohibit the dealer from passing the risk to the consumer

in short, dealer need to fork out their money to reserve a unit and assume the risk until the car is sold off
TOMEI-R
post May 17 2016, 11:08 AM

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QUOTE(loui @ May 17 2016, 11:04 AM)
Attached Image

the act clearly spell out the amount you can ask for booking fee

my understanding is that, the act act as a protection for the consumer

the act is trying to prohibit the dealer from passing the risk to the consumer

in short, dealer need to fork out their money to reserve a unit and assume the risk until the car is sold off
*
I would think this article missinterpreted what it meant by "Booking fee" as "Downpayment".

Anyway, for your info, all dealers must collect a booking fee before they proceed to solicit a loan for their customers.
loui
post May 17 2016, 11:25 AM

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QUOTE(TOMEI-R @ May 17 2016, 11:08 AM)
I would think this article missinterpreted what it meant by "Booking fee" as "Downpayment".

Anyway, for your info, all dealers must collect a booking fee before they proceed to solicit a loan for their customers.
*
i understand it is a norm to do so

you can only collect booking fees and deposits from the hirer with certain conditions

other then that, it is illegal






annas473
post May 17 2016, 11:26 AM

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1) need to pay booking fee. I'm agree with the act as well regarding the value of it.

1.1 Booking the car - color, variant etc.
1.2 Already in queue for car while waiting for bank loan approval (2week?)

2) go to bank for loan processing, either by yourself or the car seller. State how much you want to loan.

For exp.

Civic RM120k

Loan RM100k

Balance need to pay to car dealer = RM20k

3) the rest are the same. Pick up car, check it. Ask free gift etc.
TSdares
post May 17 2016, 11:31 AM

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QUOTE(TOMEI-R @ May 17 2016, 10:52 AM)
[*]Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.

You can pay the booking fees to secure yourself a unit of the car you wanted. Without a booking, how can the dealer reserve a unit of the vehicle you want for you? Again, Booking fees are paid when you want to "make a booking" for the car. You pay the Full Downpayment After your Loan is APPROVED. Downpayment is the amount to be paid for the Selling price of the car less the loan you applied for in the bank.
*
QUOTE(TOMEI-R @ May 17 2016, 11:08 AM)
I would think this article missinterpreted what it meant by "Booking fee" as "Downpayment".

Anyway, for your info, all dealers must collect a booking fee before they proceed to solicit a loan for their customers.
*
That "article" is the Act itself in written form from the KPDNKK website, I've provided the link above as "Sos 1"

As stated

QUOTE
No  owner,  dealer,  agent  or  person  acting  on  behalf  of  the
owner  shall  collect  or  accept  a  booking  fee  from  an  intending  hirer
before the receipt of the duly completed form set out in Part II of the
Second Schedule by the hirer.


The Second Schedule is the written form from the bank that basically lays out what the bank offers and for the buyer to signed to express"the amount and terms are OK". But it is not the HP agreement itself. In the second schedule it is explicitly stated"This document is given free of charge without any obligation to enter into a hire-purchase agreement." Signing the second schedule doesn't mean u will take the loan.

You can see the Second Schedule in page 77 of Sos 1 of my first post.

Point is, before you sign the second schedule, you are not obliged to pay any booking fee.

But that said, I also mentioned that it is understandable that the buyer and dealer would be keen to transact the booking fee as it offers a piece of mind for both parties. It is illegal, but it seems to be the standard practice.

JunJun04035
post May 17 2016, 12:15 PM

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QUOTE(dares @ May 17 2016, 10:36 AM)
» Click to show Spoiler - click again to hide... «

*
More reading source:
Detailed QnA regarding HP Agreement
SOS 3

Summary regarding frequent HP Agreement
SOS 4

This post has been edited by JunJun04035: May 17 2016, 12:16 PM
aromachong
post May 17 2016, 01:03 PM

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QUOTE(dares @ May 17 2016, 10:36 AM)
While reading the Honda Civic X thread, I touched upon the HPA briefly but I think most are ignorant about the laws protecting them as consumers when buying new cars, so I would like to share what I know about it and the source of my info. Please correct me if I got anything wrong.

  • Dealers are only allowed to accept a maximum of 1% of the car's price as booking fee, eg. For a RM150k car, the dealer cannot accept more than RM1.5k as booking fee. They can accept less than 1%, of course.
  • Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.
  • Upon cancellation of the booking  NO MATTER THE REASON, the dealer must refund to you a minimum of 90% of your booking. If you paid RM 1k as booking, then the dealer must refund to you a minimum of RM900. There is no such thing as "We'll only refund you if your loan x approve..."
  • The remaining 9% for the downpayment is only paid upon signing the hire purchase agreement. In the HP agreement there must be the chassis number of the vehicle allocated to
    you. You are advised to duly request that the dealer furnish you with a chassis number before agreeing to sign anything.
  • If the dealer say "we'll only order your vehicle after you paid the booking/signed the HP agreement..." look for another dealer. They are not even suppose to accept booking fees for cars that are not yet in their stockyard.
sos 1
sos 2

Again, feel free to correct me if I am wrong on any of the above points or if I missed anything.
*
Requesting bearbearwong lawyer to input more
Ginny88
post May 17 2016, 01:39 PM

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Regardless of what the Act says, it is illogical to expect the dealer to order the car for you without a booking fee. How does the dealer know you will come back? You may as well book from 10 dealers and buy from the one who gives you the car first.

JunJun04035
post May 17 2016, 01:50 PM

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QUOTE(Ginny88 @ May 17 2016, 01:39 PM)
Regardless of what the Act says, it is illogical to expect the dealer to order the car for you without a booking fee. How does the dealer know you will come back? You may as well book from 10 dealers and buy from the one who gives you the car first.
*
Because here in Malaysia, how thing works is different from how thing should works.

That's why all the loop holes, corruption and consumer con cases.


On the other hand, what you claim illogical is what I've been dealing internationally.

I order stuff from oversea > stuff being manufactured > I send my QC for inspection > Stuff get packed in container and sealed > I proceed to pay deposit.

That how it should work.

Malaysian huh.
TSdares
post May 17 2016, 01:57 PM

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QUOTE(Ginny88 @ May 17 2016, 01:39 PM)
Regardless of what the Act says, it is illogical to expect the dealer to order the car for you without a booking fee. How does the dealer know you will come back? You may as well book from 10 dealers and buy from the one who gives you the car first.
*
Like I said, everyone does it, even if it is illegal. Even I also would not expect any dealer to accept my order without a booking fee. Expediency is the word of the business - you can't expect the dealer to take your order without a booking fee, no more than the dealer want to trouble to customer to show up TWICE to sign 2 documents separately.

The objective of this thread is to educate forumers about their rights as a consumer, I am not out to upset the status quo. Whether the law is logical is not the point, even though it is still the law.

This post has been edited by dares: May 17 2016, 02:00 PM
bearbearwong
post May 17 2016, 02:54 PM

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QUOTE(aromachong @ May 17 2016, 01:03 PM)
Requesting bearbearwong lawyer to input more
*
aiyo need time... currently brain toast...
JunJun04035
post May 17 2016, 03:24 PM

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QUOTE(bearbearwong @ May 17 2016, 02:54 PM)
aiyo need time... currently brain toast...
*
welcome to FnF senpai
6UE5T
post May 17 2016, 06:58 PM

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Good info, thx for posting it!
aromachong
post May 17 2016, 07:27 PM

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QUOTE(bearbearwong @ May 17 2016, 02:54 PM)
aiyo need time... currently brain toast...
*
sifu please assist me in whats Section 38 of the Hire Purchase Act is all about? thx
TOMEI-R
post May 21 2016, 12:09 PM

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QUOTE(Ginny88 @ May 17 2016, 01:39 PM)
Regardless of what the Act says, it is illogical to expect the dealer to order the car for you without a booking fee. How does the dealer know you will come back? You may as well book from 10 dealers and buy from the one who gives you the car first.
*
Well said. Though the law is the law, common sense must still prevail. For example, if you book a car without paying anything, there is no commitment on your side. I would not reserve the car for you. If another customer comes and pays a booking for the car, I would be committed to reserve the car for him first.

QUOTE(JunJun04035 @ May 17 2016, 01:50 PM)
Because here in Malaysia, how thing works is different from how thing should works.

That's why all the loop holes, corruption and consumer con cases.
On the other hand, what you claim illogical is what I've been dealing internationally.

I order stuff from oversea > stuff being manufactured > I send my QC for inspection > Stuff get packed in container and sealed > I proceed to pay deposit.

That how it should work.

Malaysian huh.
*
Its different overseas from here in Malaysia. If you are the dealer, would you order a car from the manufacturer and reserve the car for weeks while soliciting the loan for him without him comitting any booking fee. What if the customers decides not to buy and dont want to even inform you. I can tell you this is very common in Malaysia where customers change their fickle minds and dont even bother to inform you. When you call, they just dont answer the calls.

This post has been edited by TOMEI-R: May 21 2016, 12:10 PM
mars2003
post May 21 2016, 06:12 PM

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QUOTE(dares @ May 17 2016, 10:36 AM)
While reading the Honda Civic X thread, I touched upon the HPA briefly but I think most are ignorant about the laws protecting them as consumers when buying new cars, so I would like to share what I know about it and the source of my info. Please correct me if I got anything wrong.

  • Dealers are only allowed to accept a maximum of 1% of the car's price as booking fee, eg. For a RM150k car, the dealer cannot accept more than RM1.5k as booking fee. They can accept less than 1%, of course.
  • Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.
  • Upon cancellation of the booking  NO MATTER THE REASON, the dealer must refund to you a minimum of 90% of your booking. If you paid RM 1k as booking, then the dealer must refund to you a minimum of RM900. There is no such thing as "We'll only refund you if your loan x approve..."
  • The remaining 9% for the downpayment is only paid upon signing the hire purchase agreement. In the HP agreement there must be the chassis number of the vehicle allocated to
    you. You are advised to duly request that the dealer furnish you with a chassis number before agreeing to sign anything.
  • If the dealer say "we'll only order your vehicle after you paid the booking/signed the HP agreement..." look for another dealer. They are not even suppose to accept booking fees for cars that are not yet in their stockyard.
sos 1
sos 2

Again, feel free to correct me if I am wrong on any of the above points or if I missed anything.
*
Yeah that's the law but it's not 100% consumer protection, it's just good to enforce if the customer changed his mind when buying the car. If u really paid 1 % as booking fees , I think u will get your car 6 months later.sometimes there are good offer or discount , if u really want to pandai pandai talk hp act with the dealer, u can say bye bye to it.dealer will definitely serve customer with high booking fees,
There are plenty of customer loan tak lepas, so dealer will not waste time talk hp act with you.
Now it's the buyers market so this law is not fully enforce, every one shop for best deal.

TSdares
post May 21 2016, 07:25 PM

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QUOTE(mars2003 @ May 21 2016, 06:12 PM)
Yeah that's the law but it's not 100% consumer protection, it's just good to enforce if the customer changed his mind when buying the car. If u really paid 1 % as booking fees , I think u will get your car 6 months later.sometimes there are good offer or discount , if u really want to pandai pandai talk hp act with the dealer, u can say bye bye to it.dealer will definitely serve customer with high booking fees,
There are plenty of customer loan tak lepas, so dealer will not waste time talk hp act with you.
Now it's the buyers market so this law is not fully enforce, every one shop for best deal.
*
First of all, I wanna make sure we are talking about booking fee and not the downpayment (which is 10% of vehicle price minimum).

Since the 2011 amendment to the HPA, me and my family has bought no less than 5 new cars (Proton, Ford, Mazda, Honda), and never once was we asked for more than 1% for the booking fee. In fact, I once offered more than 1% to the SA and he duly turned me down citing the HPA to me!! blink.gif And the longest we have waited for a car was 1 month, and that was due to problems with my loan documents.

If they want me to pay booking fee upfront...fine, I can do that. But I draw the line at that 1%. If the dealer asks for more than 1%, I will walk out and look for other dealers.

Furthermore, nobody ask u to threaten the dealer with the HPA. If the dealer refuse to take your order without a higher booking fee - walk away, report them to KPDNKK and let them get audited. I know this because I know someone whose job was to audit these scumbag dealers.

Everytime I buy a car, I will clarify 2 things with the dealer (in a friendly manner, of course):
  • I ask them if they will refund my booking fee if my loan is rejected or I cancel. If I do not like their answer, I will move on to another dealer.
  • I make it crystal clear to them that I will not sign the HP agreement without a chassis number. So far the dealers I've bought car with can furnish to me a chassis number as soon as they receive the LOU from my bank.
So you see, some dealers can be reasonable and willing to adhere to the law. You just need to look for them. smile.gif

Again, I'm just sharing these to so that we know our rights. I'm not asking anyone to go step on the dealers and whack them on the head with the HPA.

This post has been edited by dares: May 21 2016, 07:28 PM
Quazacolt
post Jun 30 2016, 12:48 PM

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QUOTE(TOMEI-R @ May 17 2016, 10:52 AM)
[*]Booking fee is only paid when the loan application is approved. Understandably, customers will want to pay earlier to secure their purchase especially for a hot-selling models, and sales agents are more keen to serve customers who are willing to pay earlier rather than later. You are advised to proceed with caution.

You can pay the booking fees to secure yourself a unit of the car you wanted. Without a booking, how can the dealer reserve a unit of the vehicle you want for you? Again, Booking fees are paid when you want to "make a booking" for the car. You pay the Full Downpayment After your Loan is APPROVED. Downpayment is the amount to be paid for the Selling price of the car less the loan you applied for in the bank.
*
maybe i bought a proton... 0 booking fee needed.

but really, the car has always been there, the booking fee is just to provide a priority to whoever gets the car first. more so to rare/hot selling models.

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