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Buying a car under hire purchase (HP)  is one of the most common ways to own a car. HP is the hiring of goods with the option to buy the goods at the end of the hire purchase term. If you take on HP financing, you are the hirer and financier is the owner.

As a hirer, you will have to repay the financier based on the agreed duration while you have possession of the vehicle. When all the instalments are paid up, ownership is then transferred to you. In Malaysia, only local banks are allow to provide personal hire purchase (car loan) businesses.

Local Banks with Hire Purchase Business:

 
   • Affin Bank  • Hong Leong Bank
         
 • Alliance Bank  • Maybank
       
 • AmBank  • Public Bank
       
 • Bank Muamalat  • RHB Bank
       
 • CIMB Bank    
       

Foreign Banks with Hire Purchase Business:

       
 • HSBC    
       
       

 

 

Hire Purchase FAQs

How much can I borrow from the banking institution?
The margin of financing will depend on your credit standing subject to a maximum of 90% of purchase price or any other lower margin of financing fixed by the banking institution.

What is the minimum deposit required?
The minimum deposit is 10% of purchase price. However, a banking institution may fix a higher amount.

Can I keep the vehicle registration card to enable me to renew my road tax upon expiry?
Generally, banking institutions will keep the registration card until the HP financing has been fully settled in order to prevent any inconveniences that may arise due to damage, misplacement or theft of card. As such for the convenience of their hirers, most banking institutions will provide insurance and road tax renewal services to their hirers.

If you have requested the following services from your hire purchase financier, service charges may applied for:

 • Road tax renewal
 • JPJ ownership transfer
 • Issuance of Release Letter
 • Photocopy of Hire Purchase Agreement and Guarantee Agreement
 • Letter of Consent for:

  - Interchange engine number
  - Interchange registration number
  - Duplicate registration card

 • Redemption Statement

Can I modify the monthly repayment amount if I have financial difficulties?
This is subject to your banking institution’s discretion and you are advised to discuss the matter with your banking institution.

When can my banking institution repossess my motor vehicle?
Under a HP agreement, a banking institution can repossess a motor vehicle after the hirer had defaulted two successive instalments or the final instalment.

Do I still have to pay my monthly instalments if my motor vehicle is stolen?
Yes. This is because your liability to pay the monthly instalment does not cease with the loss of your motor vehicle. However, you may claim from the insurance company, the market value of the insured motor vehicle or the sum insured, whichever is lower.

 

 

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