{"id":18720,"date":"2021-05-04T20:00:00","date_gmt":"2021-05-04T12:00:00","guid":{"rendered":"https:\/\/www.comparehero.my\/blog\/uncategorized\/what-to-do-bank-repossess-your-car.html"},"modified":"2026-03-26T16:01:50","modified_gmt":"2026-03-26T08:01:50","slug":"what-to-do-bank-repossess-your-car","status":"publish","type":"post","link":"https:\/\/www.comparehero.my\/blog\/loans\/what-to-do-bank-repossess-your-car.html","title":{"rendered":"What To Do When The Bank Repossess Your Car?"},"content":{"rendered":"\n

Edited by Anis Shakirah Binti Mohd Muslimin<\/em><\/p>\n\n

This article was first published on August 20, 2018, and has been edited and updated for accuracy and clarity.<\/em><\/p>\n

\n

Buying a car in Malaysia is a relatively easy affair, especially when it comes to the more affordable cars such as the Perodua Axia or Proton Saga. With low (or even zero) down payments and long car loan tenures, purchasing a car is accessible to most. Despite this, maintaining that purchase is another story altogether.<\/p>\n

A car loan is the first of the top four causes of bankruptcy<\/a> in Malaysia, as reported by the Insolvency Department of Malaysia. That usually happens when a person realises that they cannot continue paying a car loan<\/a>, thereby defaulting it. While it is easy to get started on purchasing a car, you\u2019ll need to be rather disciplined to continue paying for it monthly.<\/p>\n

So, what happens when you find yourself being unable to pay a car loan? You run the risk of having your car repossessed by the bank that provided you with the loan.<\/p>\n

It doesn\u2019t necessarily have to happen instantaneously after you missed one payment, however. It could be after the second or even third missed payment \u2013 different banks have different repossession terms, so it is best you clarify with your bank.<\/p>\n

With that said, there are several different stages that are taken by the banks when they act to repossess your car. <\/p>\n

Related: How To Calculate Car Insurance Price In Malaysia<\/a><\/p>\n

The car repossession process:<\/h3>\n

\"03-4-1-768x402\"As part of the car repossession process, the bank will have to send the car owner a few notices as a reminder.<\/em><\/p>\n

1. Pre-repossession notice(s)<\/h3>\n

If you\u2019ve missed your car loan payment for two consecutive months, your bank will send you and your guarantor a pre-possession notice, also known as a Fourth Schedule notice.<\/p>\n

The notice is intended to inform you that the bank is planning to repossess the car. You have 21 days after to sort out the matter to avoid repossession.<\/p>\n

After 14 days, the bank will send another notice as a reminder.<\/p>\n

2. The repossession<\/h3>\n

After that 21 days from the Fourth Schedule notice, the bank will have the right to repossess the car if any outstanding dues aren\u2019t paid.<\/p>\n

3. Post-repossession notice<\/h3>\n

After repossessing your car, the bank will send you a notice to inform you that it has successfully repossessed the car. After another 21 days upon receiving this notice, you will receive another notice, the Fifth Schedule, which will include the amount you have due to pay the bank.<\/p>\n

The Fifth Schedule notice will indicate the amount you have due to pay the bank. This will typically include the missed payments and may include additional fees and charges from the bank.<\/p>\n

4. Disposal of the vehicle notice<\/h3>\n

After 21 days of the Fifth Schedule, if you haven\u2019t paid the dues, then the bank will send you another notice stating that it will be disposing of the vehicle. <\/p>\n

The disposal process may either be sold through a public auction or a private sale.<\/p>\n

5. Selling the vehicle<\/h3>\n

The vehicle will be sold by the bank 14 days after they served you the disposal notice. <\/p>\n

Typically, the auctioned price will be at a value that is lower than the current market value. The proceeds from the sale of the vehicle will be used to pay any dues to the bank; if the amount doesn\u2019t cover the dues, then you will be required to pay the rest.<\/p>\n

Having your car repossessed is not a debacle that anyone would want to go through with. It isn\u2019t an easy process to handle either, though most banks have a Code of Ethics on Repossession that makes the process as smooth and friendly as possible. <\/p>\n

Regardless, if the unfortunate repossession of a car does happen to you, perhaps it is a sign that you may not be able to afford a car.<\/p>\n

If your car does end up being repossessed, it\u2019s important that you know your rights and the rules of repossession in Malaysia. <\/p>\n

Related<\/strong>: 10 Ways To Save Money On Car Insurance Premiums<\/a><\/p>\n

\"01-4-1-768x402\"As a car owner, it\u2019s important that you understand your rights as part of the Code of Ethics for Repossession<\/em><\/p>\n

Car repossession rules in Malaysia based on the Code of Ethics for Repossession<\/h3>\n

The following points are part of Public Bank\u2019s<\/a> Code of Ethics but edited for clarity. Remember, that different banks will have different Codes of Ethics, so ensure that you check with your bank before the repossession process starts. <\/p>\n

    \n
  1. Permit holders must ensure that they possess a current and valid permit during the course of carrying out the repossession work.<\/li>\n
  2. The number of authorised permit holders performing repossession activities must be minimised unless circumstances warrant any additional assistance.<\/li>\n
  3. Repossession work can only be carried out daily from 9 a.m. to 9 p.m.<\/li>\n
  4. Permit holders issued with a repossession order by the owner should only gain entry into premises with the knowledge and consent of the occupant. Trespassing into private property is not allowed without a court order obtained by the owner.<\/li>\n
  5. Permit holders issued with a repossession order by the owner should be well mannered and dressed decently. They should ensure the practice of professionalism and dignity in carrying out their work.<\/li>\n
  6. The use of \u201cstrong-arm tactics\u201d of any kind is strictly prohibited in the performance of their work.<\/li>\n
  7. At the time of repossession, the permit holders should:\n