The American Repossessor

Bandar Seri Begawan – Think twice before agreeing to become a guarantor for anyone applying for a car loan.

This word of advice came from a guarantor who was forced to continue monthly repayments for a vehicle that had been auctioned off after her “friend” had stopped making repayments for the loan.

Finance companies insist that it is their “legal right” to put the repossessed vehicle up for auction.

However, observers are concerned that there may have been instances where finance companies would “hastily” organise an auction. In some cases, repossessed vehicles are auctioned off for a price “well below the car market price”, they claimed.

After the repossessed vehicle has been auctioned off, the guarantor of the car loan is forced to pay for the remainder of the “basi buruk” (a saying in Malay that implies paying for something that you are not able to use anymore). In some cases, it can take guarantors several years to settle all payments.

A guarantor, who wished to remain anonymous, recently spoke to the Borneo Bulletin about her ordeal.

She claimed that she did not know that the “rightful” owner of the vehicle had not been making monthly repayments for the vehicles.

Furthermore, she was not informed that the vehicle had been repossessed and auctioned off “for just around nine per cent of the total outstanding amount including legal and administration fees”.

After she told the finance company that she did not have enough money to settle the outstanding payment in full, she claimed that the finance company decided to “take the rest of her salary balance for the next seven years, as well as a huge percentage of her future bonuses and government travelling allowances”.

She added that the finance company wanted a cut from her future Haj pilgrimage air ticket that would be issued by the government.

Observers believe that if the guarantor had known that the car was being auctioned off at a “bargain price”, she would have taken the car and make the necessary repayments. Instead, she is now left with paying for something that she cannot even see or use for the next several years, they said.

At the end of the day, a car is not yours until you have repaid the whole sum to the finance company.

Finance companies have the legal right to repossess vehicles of people who fail to make their monthly repayments for the car loan.

Concerned members of the public hoped that finance companies will take steps to inform all parties, particularly guarantors, before repossessing vehicles. “After all, this is people’s livelihood we are talking about,” they said. — Courtesy of Borneo Bulletin