Hire Purchase or Loan

There is a lot of difference when you choose to buy something with the help of a loan and when you do it on hire purchase basis. In the former case, the ownership passes to you but in the later case you are just in possession and not a legal owner. It means that a person who has bought a car on hire purchase cannot sell it. Simple enough, he is not an owner of the car and, therefore, he has no such right.

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Popularity: 28% [?]

You want to buy a car so that you can commute to office and other places with ease. But purchasing a car needs high amount of money. So, like many, you too want to purchase a car by financing it through a car loan but are worried about high rate of interests. In that case, low interest car loan can solve your problems.

Check the list below for your references. Make calls to your favorite banks to get the latest rates they might have.

1. Loan date : February 2008
2. Which Bank ublic Bank
3. How many years of loan & Interest rate.: 7 year + 2.43%
4. Loan amount.: 50k

1. Loan date : July 2008
2. Which Bank :Maybank (MBB)
3. How many years of loan & Interest rate.: 2.86% – 7 years / 2.94% 9 years (Both Rates are Corporate rate)
4. Loan amount.: 45k

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Popularity: 17% [?]

Hire purchase (HP) financing is one of the most common ways for people to buy private vehicles. If you take on HP financing, you become the hirer while the financier financing the vehicle is the owner. As the hirer, you will have to pay installments to the financier based on an agreed duration while you will have possession of the vehicle. When all installments are paid up, ownership is then transferred to you, the hirer.

A Hire Purchase agreement must contain the following important information:

• Description of motor vehicle
• Calculation of total sum payable
• Minimum deposit
• Term charges and annual percentage rate
• Late payment charges
• Date on which hiring commences
• Number of installment repayments
• Amount of each installment repayment
• Person to whom repayments are to be made, time and place of repayments
• Address where the motor vehicle is to be kept

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Popularity: 6% [?]

Car buyers will have to pay more in monthly installments now that hire purchase interest rates have gone up.

Just a few months ago, banks offered interest rates at around 2.5%. Now, the rates are between 3.4% and 4.7% for new cars.

Maybank hire purchase senior manager Nor Siah Othman said the bank had experienced a drop of about 40% in car loan applications in the past two months due to higher rates.

She also advised car owners to restructure their loans to stretch the monthly payments longer after a few years of repayments if they find it a burden to service their loans.

A freelance car salesman identified only as Teo said a buyer taking a RM42,000 loan would have to pay about RM54,000 over seven years – about RM4,000 more compared to the RM50,000 paid when the interest rate was 2.7%.

AmBank group public relations manager Norlidah Abd Rahman said not all banks charged as high as 4.3%.

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Popularity: 4% [?]