The Government has agreed to revise the recently amended Hire Purchase Act 1967 (HPA) following the brouhaha it created since its implementation barely two months earlier.
Following a meeting with the Domestic Trade, Cooperatives and Consumerism Ministry yesterday, the Malaysian Automotive Association (MAA) said the bulk of the amendments that were made to the HPA would be revised.
“The meeting went well. Most of the MAA's requests were accommodated,” its president Datuk Aishah Ahmad told StarBiz when contacted yesterday.
“The changes will now make it easier for registrations and will take effect immediately. The Government will issue a circular on the changes next week,” she said.
The MAA earlier this month said local automotive players were not consulted over the amendments to the HPA which took effect on June 15.
Since its implementation, automotive players had been complaining that the Act had created confusion and delayed the car-buying process.
Aishah clarified that the new revision by the Government did not mean that the HPA would revert to its pre-June 15 amendment status.
“Some clauses will be amended while others will remain. Simply put, it makes car registrations easier.”
Among the contended issues when the amended HPA was implemented last month was the 1% maximum booking fee (based on the total selling price) which required car sellers to refund customers 90% of the booking fee if the deal were to fall through.
This meant that car sellers or dealers could not accept booking fees before the car buyer is served with a Second Schedule notice.
The Second Schedule notice can only be completed and served, in practice, on the car buyer usually after the hire-purchase loan application is approved.
The remaining 9% downpayment on the car can only be paid when the hire-purchase agreement has been prepared, with details such as the car's chassis number included.
This meant the hire-purchase agreement can only be prepared after the actual car unit has been allocated to the dealership.