What are the legal steps for repossession of car in Malaysia?
STEPS TO REPOSSESSION
Step 1: Pre-repossession notice
A pre-repossession notice (Fourth Schedule) will be served on you (personally delivered or send by registered mail to your last known address) and your guarantor.
This is a 21 days notice in writing from your banking institution to inform you that it intends to repossess the vehicle.
This will be followed by a second notice, 14 days after the Fourth Schedule notice.What can you do?
Step 2: Repossession of your vehicle
Upon the expiry of 21 days stated in the Fourth Schedule notice, repossession is allowed if you fail to pay the outstanding arrears.
Step 3: Post-repossession notice
Upon respossession of the motor vehicle, your banking institution will send a notice in writing informing you that it has taken possession of the vehicle.
This will be followed by a Fifth Schedule notice to you and your guarantor within 21 days after the repossession has taken place.What can you do?
Step 4: Notice on disposal of motor vehicle
If the amount due under the Fifth Schedule notice is not paid within 21 days after the Fifth Schedule notice, your banking institution can sell the motor vehicle through a public auction by giving you a notice 14 days before the date of the auction or conduct a private sale to sell the motor vehicle.
Step 5: Selling the motor vehicle
Sale of the motor vehicle can take place after the 14 days given in the notice in Step 4.
As auction prices are based on forced sale value, it will be lower than the prevailing market value. The auction price may also reduce at each subsequent auction carried out.
If proceeds from the sale of the motor vehicle are inadequate to pay the outstanding amount due, your banking institution will recover the shortfall from you. You will also need to bear the auction expenses.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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