Can I sell my car that is under hire purchase with bank or other financial institutions
Yes, you can sell a car that is under hire purchase with a bank or other financial institution, but there are certain steps you need to follow to ensure a legal and smooth transaction. Here's how the process generally works:
1. **Check the Hire Purchase Agreement:** Review your hire purchase agreement carefully. Some agreements might have clauses that restrict your ability to sell the car until you have completed a certain percentage of the payments or until a specific time has passed. Make sure you understand any restrictions outlined in the agreement.
2. **Contact the Lender:** Get in touch with the bank or financial institution that provided the hire purchase financing. Inform them of your intention to sell the car. They will provide you with information on the outstanding balance on the loan.
3. **Determine Car's Market Value:** Determine the current market value of your car. This will help you understand the amount you need to sell the car for in order to cover the outstanding loan balance.
4. **Find a Buyer:** Look for a buyer who is interested in purchasing your car. Be transparent with potential buyers about the hire purchase arrangement and any outstanding loan balance.
5. **Negotiate Sale Price:** Negotiate the sale price with the buyer. The sale price should ideally cover the outstanding loan balance and any additional costs associated with the sale.
6. **Pay Off Outstanding Loan:** Once you and the buyer have agreed on the sale price, use the proceeds from the sale to pay off the outstanding loan balance to the bank or financial institution. If the sale price is higher than the outstanding balance, the remaining amount is yours to keep.
7. **Transfer Ownership:** Complete the necessary paperwork to transfer the ownership of the car to the buyer. This includes providing the buyer with a Release of Hire Purchase document from the lender, which confirms that the loan has been paid off and the car is free from any encumbrances.
8. **Notify Relevant Authorities:** Notify the local Road Transport Department (JPJ) about the change of ownership. This is a legal requirement when selling a car in Malaysia.
9. **Settlement Letter:** Request a settlement letter from the bank or financial institution. This letter confirms that the loan has been settled and the car is no longer under hire purchase.
10. **Release of Title:** The bank will provide you with the release of title documents after the loan is paid off. This confirms that you have full ownership of the car, and you can provide this to the buyer.
Remember that the exact process may vary based on the terms of your hire purchase agreement, the policies of the bank, and any changes in regulations. It's important to communicate with the bank and follow the proper legal procedures to ensure a smooth and lawful sale. If you're unsure about any step in the process, consider seeking legal advice or consulting with the bank's representatives.