Why you should avoid sambung bayar deals

If you want to buy a car but cannot afford a loan, you might be tempted to sambung bayar. This is when you “buy” a car from someone who has not yet paid off their loan but is unable to sell the car for one reason or another. The “buyer” then pays a small deposit and pays the loan instalment every month. This is very attractive for the “seller” who gets money without the fuss of the ownership transfer while the “buyer” gets a lower monthly commitment. This is dangerous, however, as sambung bayar is full of risks.

Legal issues

The primary issue with any sambung bayar deal is that it is illegal. Per the Hire Purchase Act of 1967, a sambung bayar deal is considered fraudulent.

Every person who, by the disposal or sale of any goods comprised in a hire-purchase agreement, or by the removal of the goods, or by any other means, defrauds or attempts to defraud the owner shall be guilty of an offence.

This is because until your hire purchase or loan to the bank is paid off, you technically do not own the car. The bank does. This is why if you want to sell your car before your loan is fully paid off, you will need your bank’s permission. If you sign a sambung bayar deal, you can be fined up to RM30,000 and/or be sentenced to 3 years in prison.

Read more: How to sell your car with Carro

But let’s say you have a contract and got them to sign it. Too bad it is void per the Contracts Act of 1950 which states:

Every agreement of which the object or consideration is unlawful is void.

The owner is still responsible

If you get into a sambung bayar agreement, the ownership of the car remains with the original owner. So if your “buyer” one day decides to stop paying, you will be left holding the bag. You will need to continue paying the loan. If you don’t, your credit score will be impacted and it will be harder to take out loans in the future.

This responsibility does not end with loans. Summons, insurance and road tax renewal are all the owner’s responsibility. So if you “sell” your car and it gets into any sort of trouble, you’re the one who has to foot the bill.

Read more: How to check and pay your car saman online

You cannot report your vehicle as stolen

Let’s say the guy vanishes. All attempts at communication fail. You go to the police and explain the situation. They would like to help you, but there is only one tiny problem: you voluntarily gave the “buyer” the car. Section 378 of the Penal Code clearly states:

Whomever, intending to take dishonestly any movable property out of the possession of any person without that person’s consent, moves that property in order to such taking, is said to commit theft.

So since you gave the car to the “buyer” there technically is no theft. You still will get in trouble for the sambung bayar deal though.

The “buyers” do not legally own the car

As a “buyer” of the vehicle, you are not protected by the car insurance as you are not the legal owner. You could add your name to the policy but that is a temporary solution. The real problem is you never legally own the car. When you pay off the loan, the ownership of the car is then transferred from the bank to the “seller”. If you want to sell it or pass it to someone else, you simply cannot.

If at any moment the owner passes away, you don’t get the car. The family does. Unless they are kind enough to uphold the original deal or transfer ownership to you, the car will belong to them. If they ask for the car back, you really have no choice but to return it to them.

Read more: how to transfer car ownership after the death of the owner

The car may have problems

Not everyone is a trained mechanic. We can’t tell if a car is faulty or has its mileage tampered with. This is a reason why you should buy cars that are inspected by Puspakom or a trusted company like Carro. Otherwise, you might be stuck with a lemon, or even worse, a stolen car! That will bring you a lot more trouble.

In sum, it is never a good idea to get into a sambung bayar deal. To avoid all the possible complications above, always make sure you get a real car and the ownership transfer completed.

So if you want to buy an affordable used car, it’s best to go to a trusted company like Carro. That way you can be sure that your car will be As Good As New and enjoy a 1-year engine and gearbox warranty.