If you`re thinking of purchasing a big-ticket item like a car or an appliance, you might consider a hire purchase agreement. This is a type of financing that allows you to buy an item and pay for it over time in instalments. In Malaysia, this type of agreement is governed by the Hire Purchase Act 1967.

Under a hire purchase agreement, you typically pay a deposit and then make regular payments over a set period of time. Once you`ve made all the required payments, you own the item outright. In the meantime, the lender retains ownership of the item and can repossess it if you fail to make your payments.

The Hire Purchase Act 1967 provides protection for both the buyer and the lender. For the buyer, it ensures that the terms of the agreement are fair and transparent. For the lender, it provides a legal framework for repossessing the item if the buyer defaults on the payments.

Here are some key provisions of the Hire Purchase Act 1967:

– The agreement must be in writing and signed by both parties.

– The buyer must be given a copy of the agreement.

– The agreement must specify the item being purchased, the amount of the deposit, the total amount to be paid, the number and amount of the instalments, and any additional charges or fees.

– The buyer has the right to terminate the agreement at any time by giving notice in writing and paying any outstanding amounts.

– The lender can only repossess the item if the buyer has defaulted on at least one payment and has been given notice of the default.

– The lender must give the buyer a reasonable opportunity to remedy the default before repossessing the item.

– The lender can only sell the repossessed item after giving the buyer notice and an opportunity to object.

– The buyer has the right to receive any surplus from the sale of the repossessed item after all outstanding amounts have been paid.

It`s important to carefully review the terms of any hire purchase agreement before signing. Make sure you understand the total cost, including any fees and charges, and the consequences of defaulting on payments. If you have any questions or concerns, don`t hesitate to seek legal advice.

In conclusion, a hire purchase agreement can be a convenient way to purchase a big-ticket item over time. However, it`s important to understand your rights and obligations under the Hire Purchase Act 1967 to ensure that you`re protected and can make informed decisions.