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You Can Save On Your Car Loan With New Revamp of Rules

Car buyers in Malaysia will soon get fairer car loans after the government decided to remove the old “Rule of 78.” This rule has been used for decades in hire-purchase loans but was often seen as unfair. The change comes with the new Hire-Purchase (Amendment) Bill 2025, passed on October 8, which replaces the old system with a fairer one.

Before this, car buyers had to pay most of their loan interest at the start of their repayment. This meant that if they paid off the loan early, they didn’t save much money. Because of that, many people chose longer loan terms instead of finishing payments sooner.

Now, with the new “reducing-balance” system, interest will be charged only on the remaining loan amount, not the total borrowed. This means buyers who pay early or take shorter loans will save more money. Banks must also clearly show the real interest rate to customers.

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Honda Malaysia Offers 100% Loan Option for Honda City

Honda Malaysia has made an announcement offering buyers the opportunity to drive home the popular Honda City B-segment sedan with a 100% loan option, completely eliminating the need for an initial downpayment. This incredible offer stands in contrast to the typical 90% loan and 10% downpayment arrangement.

Participating Banks: The partner banks facilitating this groundbreaking offer are Maybank and Bank Muamalat. Potential buyers will, of course, need to meet the loan qualifications to take advantage of this opportunity. It’s essential to note that the offer pertains exclusively to the Honda City sedan, and there is no mention of the City Hatchback in this deal.

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“Sambung Bayar” Car Involved In Robbery

So, you’re considering a “sambung bayar” deal to sell your car while there’s still an outstanding loan in your name? Maybe it’s time to reconsider.

As reported by NST, Amir (not his real name) faced a double setback after losing his job when his car, surrendered to a repossessor under the impression of a legitimate “sambung bayar” arrangement, was later found to be involved in a robbery.

In a state of desperation, Amir opted for the “sambung bayar” practice through an agent, hoping to find a new owner to take over his loan. This would allow him to navigate the financial strain of his outstanding loan without the burden of the car.

However, the situation took an unexpected turn. Instead of finding a legitimate new owner, the repossessor paid Amir RM1,000 and sold his car to an individual who was supposed to continue servicing the loan. This misrepresentation left Amir both financially and emotionally burdened, highlighting the potential risks and pitfalls associated with such transactions.

Unfortunately, the new owner misused Amir’s car and failed to continue servicing the loan, leaving Amir in a dire situation. Despite never meeting this new owner, Amir learned from the police that his car had been used in a robbery.

Regretting his decision to surrender the car to the repossessor for illegal resale, Amir, a former aircraft engineer, faced a daunting situation, worsened by financial challenges due to the pandemic’s impact on the airline industry.

Siva, another victim of this deceptive practice, sought help from a man who promised to find a buyer for his Perodua Alza to settle his loan. This man convinced Siva to lodge a report to seemingly legitimise the transfer of ownership.

The new owner initially paid Siva’s loan for a year, giving a false sense of relief. However, payments stopped, leaving Siva in a precarious situation. Through persistence and resourcefulness, Siva managed to recover his car, settling the loan and ensuring a fair resolution for all parties involved.