|
Hire
Purchase is a system of acquiring goods on credit whereby the
seller of the goods is regarded as the dealer, the purchaser
is regarded as the hirer and the finance company as the owner.
The ownership of the goods bought on hire purchase does not
pass to the hirer at the time of the hire purchase agreement
or upon delivery of the goods.
The
ownership of the goods remains in the finance company until
the hirer has fully settle the price agreed upon in the hire
purchase agreement. A hire purchase agreement, commonly known
as HP agreement, in respect of the goods must be in writing
and printed in type of a size not smaller than the type known
as 10-point Times. Any oral agreement is not a valid hire
purchase agreement.
The main legislation governing the hire purchase transactions
in Malaysia is the Hire Purchase Act 1967, which came into
force on 11 April 1968 after hire purchase became an
increasingly popular method of acquisition.
Only the following goods can be bought on hire purchase in
Malaysia:
all
consumer goods
motor
vehicles namely
- invalid carriages
- motor cycles
- motor cars including taxi cabs and hire cars
- goods vehicles where the maximum permissible laden weight
does not exceed 2,540 kilograms
- buses, including stage buses
The most
common type of Hire Purchase agreement in Malaysia is for the
purchase of motor vehicle.
|
