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In Malaysia, one of the most common ways in order to purchase a car is through a service offered by most of the financial institution within the whole of Malaysia.

This common way of purchasing a new or used car is known as hire purchase service.For hire purchase, it is offered by most of the major financial institutions in Malaysia, some of these financial institutions include local and international banks.

Hire purchase is actually the hiring of goods where in the future, the hirer (consumer) will have the option to purchase and own the goods once all of the installments have been fully paid.

Before the installments are fully paid, the financial institution which leases the payment for the car will retain the ownership of the car until when the installments are fully paid by the leaser.

Besides car, most of the consumer items for household or personal usage and as well as vehicles like taxis and buses can be purchased via the option of hire purchase. The minimum deposit for hire purchase will be nothing less than 10% of the cash price of the vehicle. However, the rate of 10% may vary between different financial institutions and in some cases, the rate may be significantly higher than 10%.

As for the payable interest rate, the financial institution can charge an annual interest rate no more than 10% and in addition to that, the interest rate that is charged by the financial institution will remain fixed over the entire hire purchase tenure. Lastly, there are two ways where a consumer can acquire the hire purchase services.

One of the way if by dealing it directly with a finance company whereas the other method is to apply for the hire purchase service via a dealer, such as a motor vehicle dealer.