Aida Zabidi
This is a story about a nightmare I went through with my car loan. 

It all started a few months ago when I tried to pay off my credit cards through my online banking account. Imagine my surprise when the transaction was declined. A quick call to the bank informed me that I had a problem with my loan. 

I had actually sold off my last car in August last year. I went to my local Honda dealership and the Honda salesman put me in touch with a third party salesperson named Leslie. The initial agreement was for the third party salesman to pay the value of the remainder of my loan, which was about RM10000. I remember signing some documents for the sale of the car, and getting my thumbprint scanned through a portable scanner, and Leslie showed me on the JPJ website how my car grant had been transferred to his name. 

All fine and good until this whole issue cropped up almost a year later. I found out when my bank accounts were blocked. 

BLOCKED. 

Imagine my shock – I had always been diligent about servicing my loans and my credit cards, and initially I couldn’t think of what I might have done to have caused this. I was informed over the phone that I was behind my loan payments for my car. I was confused, and told them I made the payment myself every month, and there was no way I could be behind on these payments. After calling around, I found it this loan was for my previous car. 

Wait. 

But I sold off my car one year ago! 

Everyone who has dealt with bureaucracy would probably feel my pain, but this is apparently a very common scenario that happens (as the lady at Bank Negara very patiently informed me), and I was a victim due to my own ignorance of financial matters, which is why I have decided to put this out there. 

When you sell off your car, two things need to be done: Your car grant needs to be changed to the name of the new owner, and your loan has to be cleared. 

LESSON ONE
In the whole process of this transaction, I was told that the loan would be transferred. In my head, it meant that the new owner would take over the existing loan and continue to service it. 

Apparently there is no such thing

Whenever you sell a car, the existing loan needs to be paid off and you should get a discharge summary from the bank. A new loan is then made for the new owner. There is no such thing as a transfer of a loan, which I was told repeatedly by the car salesman 

LESSON TWO
The change of the car grant name has to be done through JPJ, either through the website or at the JPJ counters. In my case, the dealer had come over to my house and logged on through the JPJ website and proceeded to change the grant name, which he had shown me himself. He had a portable thumbprint scanner which seemed to make the process even more legit. 

Apparently, this is a viable way of changing the car grant; however – once the change of name request is submitted, JPJ will first check with the bank to confirm the loan status. If the loan has not been settled, the request to change grant names will be rejected

LESSON THREE
Make sure you check with your loan officer regarding the terms of your loan and if they have the capacity to actually freeze your assets with regards to a loan default. This should be written in your loan agreement but this is usually in legalese and the average person might not understand the legal or financial terms set. It took about three days to unfreeze my accounts and I was lucky that I had friends who were kind enough to help me out in my period (as I like to call it) of temporary bankruptcy. I was also lucky that the loan officer was reasonable enough to consider my request to temporarily block the amount that was currently owing (which was only about RM3000 at the time). 

I eventually sorted out my case with the managers at Honda, who were shocked that I had essentially been cheated and they managed to resolve the case internally. 

However, in the process of talking to friends, it was interesting to realize that so many people essentially had the same misconceptions as I did about loans, which prompted me to write this article. It is apparently a common scenario that happens to many people as well, and I was informed by officers at Bank Negara this has often led to the bankruptcy of some individuals, especially when it comes to more expensive cars. 

I was lucky that nothing much happened – although I probably have to check with CCRIS to make sure that the whole experience didn’t leave me blacklisted, but things eventually did get sorted out. Hopefully no one will get stuck in the whole messy experience that I did!
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