Quick answer: Sambung bayar kereta means handing your financed car to someone who continues the instalments without the bank’s consent. KPDN treats it as an offence under Section 38 of the Hire-Purchase Act 1967, with a fine up to RM30,000, up to three years’ jail, or both. The legal route is a transfer with the bank’s consent.
Every sambung bayar story begins with the same legal authority: Abang Mamak Lawyer. (He has no law degree, no firm and no surname, but he has a teh tarik and total confidence. “Boleh, bro, everybody do.”) I am not a lawyer either, as my ability to lose arguments with a parking machine proves. So this guide uses the Act itself and the ministry that enforces it, and tells you what a car owner can do instead.
What does sambung bayar kereta mean?
Sambung bayar means a private deal where one person takes a car on hire purchase and another person keeps paying the bank, while the loan stays in the first person’s name. Usually there is a small deposit, a handwritten agreement and a handshake. It looks cheap because it skips the bank, the checks and the paperwork.
(Those are also the three things that protect you. Abang Mamak Lawyer calls this “a technicality”.)
The key detail is who owns the car during hire purchase. Under the Act, the financier is the “owner” and you are the “hirer” until the agreement is finished. So the person “selling” a sambung bayar car is selling something that, on paper, belongs to the bank.
(I once tried to sell my brother his own bicycle. Same legal energy, and he was also unimpressed.)
| Question | Proper transfer | Sambung bayar |
|---|---|---|
| Bank agrees? | Yes, written consent | No |
| Loan name | New hirer takes on the agreement | Stays with the original person |
| Legal position | Allowed under Section 12 | KPDN says offence under Section 38 |
| If payments stop | New hirer answers to the bank | Bank chases the original person |
| Who the JPJ record shows | Updated through the proper process | Original person |
What does the law say about sambung bayar?
Section 38 of the Hire-Purchase Act 1967 makes it an offence to defraud the owner by selling, disposing of or removing goods under a hire-purchase agreement. The penalty is a fine of up to RM30,000, up to three years’ jail, or both, according to the Act as published by KPDN. In May 2023, KPDN enforcement director-general Datuk Azman Adam said sambung bayar contracts are not valid, as reported by Paul Tan. (Note that this is a director-general, not a man holding a teh tarik.)
Two honest details about those numbers. KPDN’s published copy is a reprint as at 1 May 2019, and the Hire-Purchase Act was amended from 1 June 2026. The coverage we found is about how interest is worked out, not Section 38, but check the current text or ask a lawyer if you are in a real dispute.
| Section | What it does | Why it matters to you |
|---|---|---|
| Section 12 | Lets a hirer assign rights with the owner’s consent | This is the legal version of what sambung bayar pretends to be |
| Section 12(2) | The owner generally cannot charge for that consent itself | Consent is not meant to be a toll gate |
| Section 38 | Fraudulent sale or disposal by the hirer | Fine up to RM30,000, jail up to 3 years, or both |
What are the risks for the person handing over the car?
The biggest risk sits with the person whose name stays on the loan, because the bank and the authorities still see that name. If instalments stop, the debt is still yours, and missed payments can land on your credit record. Summonses and offences committed with the car may also find their way to you, a risk KPDN flagged in its 2023 statement.
(Imagine receiving a speeding summons from a town you have never visited. The car went on holiday without you.)
- The debt stays yours. Your agreement with the bank has not changed.
- Your record takes the hit. Late payments appear under your name, not the driver’s.
- The car can vanish. A deal built on a phone number ends when the phone stops answering.
- Section 38 points at you. You are the one who disposed of the car.
People rarely do this for fun. Most are trying to escape an instalment they can no longer carry, and that is a reasonable problem with a bad solution attached. (Abang Mamak Lawyer has never once offered to pay your fine, in case you were wondering.) There are better first calls, and we will get to them shortly.
| If this happens | Who it lands on |
|---|---|
| Instalments stop | The person named on the loan |
| Car disappears | The person named on the loan |
| Bank takes back the car | The person driving it loses it |
| Car is written off | The driver, with a messy claim |
What are the risks for the person taking over the car?
The person taking over gets the use of a car but no legal title to it, so they can lose both the car and the money already paid. Every instalment goes towards a car that belongs to the bank and is registered to somebody else. The Rakyat Post’s May 2026 guide also warns that the insurance stays in the original owner’s name, which can make a total-loss claim messy. (So you have paid for a car, a road trip’s worth of petrol, and a very long phone call with an insurer.)
The bank can also act against the car if the first person falls behind, even if you paid your part on time. Your receipts show a private arrangement that the bank never agreed to. (You may frame them. They make a sad but very well-documented wall feature.)
Can you pajak a car that is not fully paid?
Pajak kereta belum habis bayar runs into the same problem as sambung bayar, because the car still has a bank’s claim on it. Anyone offering cash against a car under loan is asking you to pledge something you do not fully own. Perfect Pajak Car only accepts fully paid cars, so a car still under a bank loan is not accepted. (We say no to this one before Abang Mamak Lawyer finishes his teh tarik.)
If the car is fully paid and you want cash without selling, see how Perfect Pajak Car works. If it is not, the next section is the one you need. JPJ’s transfer guide also says a change of ownership must be free of pending financial institution claims, so the bank’s claim shows up at the counter too.
What are the legal ways out of a car loan you cannot afford?
The legal routes all start with talking to your bank, not to a stranger on Facebook Marketplace. It is usually easier to have that talk before you fall behind than after. (Calling your bank feels about as fun as calling your dentist to confess, but the person on the line has heard worse.)
| Option | How it works | Who to call |
|---|---|---|
| Ask about restructuring | Ask whether your instalments can be changed | Your bank |
| Transfer with consent | A new hirer takes on the agreement under Section 12 | Your bank |
| Sell and settle | Sell properly and use the money to clear the loan | Your bank, then a buyer |
| Get debt counselling | AKPK offers counselling and restructuring help | AKPK, 03-2616 7766 |
Sell-and-settle only works if the sale price covers what you owe, so ask the bank for a settlement figure first. Our pawn versus sell comparison helps once the car is fully paid and both options are open to you.
And if Abang Mamak Lawyer brings it up again, buy him a teh tarik, thank him warmly, and show him Section 38. (He will say “that one different case”. It is not a different case.)
Frequently asked questions
Is sambung bayar kereta illegal in Malaysia?
KPDN says a sambung bayar deal without the financier’s consent is an offence under Section 38 of the Hire-Purchase Act 1967, and such contracts are not valid.
What is the penalty for sambung bayar?
Section 38 carries a fine of up to RM30,000, up to three years’ jail, or both. The figure is from the reprint as at 1 May 2019 published by KPDN.
Can I transfer my car loan to someone else legally?
Yes, with the bank’s consent. Section 12 of the Hire-Purchase Act allows a hirer to assign their rights with the owner’s consent, subject to conditions.
Can I pawn a car that still has a loan?
Perfect Pajak Car does not accept cars still under a bank loan. Only fully paid cars are accepted.
Who pays if the sambung bayar driver stops paying?
The person named on the hire-purchase agreement remains responsible to the bank. A private agreement with the driver does not change that.
Apakah hukuman sambung bayar kereta?
Seksyen 38 Akta Sewa Beli 1967 memperuntukkan denda sehingga RM30,000, penjara sehingga tiga tahun, atau kedua-duanya. Pindahan yang sah memerlukan kebenaran pihak bank.
Get help
Own your car outright and need cash? Perfect Pajak Car gives cash against fully paid cars while you keep driving, usually within 24 hours. Your car stays with you the whole time. You need your car grant, your IC, and the car’s model and year, and the amount depends on the model and year.
WhatsApp +60 11-2571 5206 between 8am and 11pm daily, or read about Perfect Pajak Car.
Sources
- KPDN – Hire-Purchase Act 1967 (Act 212), reprint as at 1 May 2019
- Paul Tan – KPDN on sambung bayar contracts, 22 May 2023
- Malay Mail – Amended hire purchase rules from 1 June, 31 May 2026
- The Rakyat Post – Sambung bayar risks, 15 May 2026
- JPJ – Guide to Voluntary Transfer of Ownership
- Bank Negara Malaysia – FAQ on CCRIS
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