“Kereta Sambung Bayar” (cars continue to pay or continue to loan the car) has gained more popular in recent years in Malaysia and some other countries. This is because more and more people are unable to pay off their credit card debt, mortgage loan, and some other loans and causing them get blacklisted in central bank. People who are blacklisted or bankrupt are not able to obtain any new or used car loan from bank. Hence, there is “Kereta Sambung Bayar”.

What is actually “Kereta Sambung Bayar” means? It is a term to describe a car on sale but the buyer is not require to obtain any new car loan. The buyer can continue to pay the car loan. The car will belong to the buyer until the loan is fully paid off. This has sounded very attractive especially for people who are unable to get any car loan but they urgently need a car.

How it works?

When someone is no longer able to pay their car loan, there are some dealers will take over these cars and put it on sale with the “Sambung Bayar” title. Some of these cars are obliged to few months’ late payment while some are cars going for auction soon. Dealers target on foreign students, foreign resident, buyer with bankruptcy, or blacklisted in CCRIS (Central Credit Reference Information System). Other than that, buyers with good credit score but currently having too much of loans are also targeted. This is because they are hardly obtaining a new loan for cars.

The process is quite simple and straight-forward. Buyer will only have to pay a down payment or deposit base on the car they want and prepare these documents:

• Photocopy of their Identity card (IC)
• Most recent 3 months pay-slip or income statement

Surprise? That is, that is the only few documents you need in order to drive a car home.

What are the risks of buying these cars?

There are many car dealers specializing in Kereta Sambung Bayar because the profit margin is optimism. Buyer will have to start pay for the car loan once he agreed to buy the car. However, the ownership and the debtor are still belong to the person who is unable to pay the car. The new buyer just gets the car and pays the monthly payment. The ownership of the car will only transfer right after the loan is fully paid off. It has got nothing different with those who purchase a new car from any car dealer because the ownership of the car is belong to the creditors or banks and it will only transfer to the buyer once the loan is fully paid off. Although there is a black and white document signed between seller and buyer and witnesses by car dealer, the risk is still there.

• Is the document legalized?
• Is the document having enough information? Is it complete with all the terms and condition?
• What if the previous owner dies during the period of time?

People are consistently having the attitude towards cheap used cars. Majority of first time car buyer have wrong thoughts which they think these kinds of cars are cheaper than market price which apparently are not. Look through the market, most of the “Sambung Bayar” car require higher deposit or higher down payment if you compared with a normal used car. This is because the previous owner has been dragged the monthly car payment for months and the new buyer will have to help him clear that before he able to continue the car loan. Moreover, these cars did not clearly state the exact amount remaining in loan. Check properly before you going to make your decision.

If you are not having bad credit, bankruptcy, blacklisted, what is the point of going for cars continue to pay? In a nutshell, the whole deal is people who is bankrupt/blacklisted purchase a car from people who going to bankrupt or blacklisted because they are no longer able to pay off the car loan.