In Malaysia, what can you do if a car dealer is late in delivering your car?

After months of saving up, you’re finally able to put a down payment on your dream car. You head over to the nearest showroom and proceed with the paperwork. A few days later, your loan gets approved by the bank. The car dealer then tells you to come pick up your brand new car in two weeks.

The two weeks go by, but you don’t receive a call from the dealer. Instead, you call them to find out what’s happening. The dealer tells you that they’re going to need another month to get your car ready, due to a surge of orders.

Now this may not seem like a major thing to most...but one of our readers shared his story of how he’s been waiting to get his new car for several months. So what if like him, you needed to get your new car urgently but there is a massive delay—can you actually take action against the car dealer?

Check the terms of your agreement

When you buy a new car, you would naturally sign an agreement/contract with the dealer. This contract will detail all the obligations that you and the dealer would have towards each other. One simple and straightforward example would be that you need to pay a down payment before taking the car. But besides these very basic terms, they would also contain finer ones such as if a delay of car delivery were to happen. As an example, we searched online and found one from an actual car dealer in Malaysia. It said:

“All delivery dates for the Vehicles are best estimates only. We will not be liable for increased cost, loss of profits or goodwill or any other special, incidental or consequential damages due to late delivery or non-delivery of the Vehicles.”

In other words, it says that any delivery dates given by the dealer are merely estimates, and that you cannot hold them responsible if they were to deliver past those dates. While this can be seen as unfair to the buyer, dealers are allowed to impose such terms to cover themselves, especially if the delay was through no fault of theirs (technical issues, sudden shortage of manpower etc.). 

But just because an agreement contains a certain term, it doesn’t mean that it’s always valid. The Consumer Protection Act 1999 prohibits businesses from imposing terms that are outright unfair to consumers. For example, if a car dealer delivered your car over 6 months past the promised date with no justification for the delay, this would be seen as excessive. The court may prevent the dealer from relying on a term which excludes them from taking responsibility, if the term puts you at a great disadvantage. Instead, they could make the dealer compensate you for those 6 months.

But if the term in the contract that allows for the delay is fair enough, it can be valid. For example, the term might say that if there is a delay, they would compensate you monetarily or by giving you free accessories.
 

There’s now a law to pause contracts

Besides terms in contracts, there’s also now a law which can give parties to a contract some extra time to complete their end of the bargain. When Covid-19 first started, most businesses had to temporarily close. Because of this, many could not fulfill pending orders by customers, and this included the automobile industry.

To prevent people from being sued for delays that weren’t in their control, the Temporary Measures for Reducing the Impact of Coronavirus Disease 2019 (COVID-19) Act was passed just recently. This Act would allow any contracts from the start of the first MCO to 31^st December 2020, to be paused. This means that the parties will have no legal obligation towards each other for that short period of time. However, it doesn’t apply to contracts that existed before this Act came into effect.

The bottom line is this: delays are allowed if your contract allows for it, and if this new Covid-19 Act applies to you. However, your car dealer cannot misuse either of these to justify a delay in delivery, especially if they had the chance to give you your car sooner.

If the delay is deliberate and unreasonable, you can sue them for breaching the agreement. Alternatively, you can file a complaint with the Ministry of Domestic Trade and Consumer Affairs.