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How do you transfer car ownership to another person in Malaysia?

2021-05-10 691b2141 a707 421f 8f92 2bc2c1a7f386 Mikaela A

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This article is for general informational purposes only and is not meant to be used or construed as legal advice in any manner whatsoever.

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We recently wrote on how to transfer ownership of property in Malaysia.

[READ MOREHow do you legally transfer property to someone else in Malaysia?]

But one of our readers also asked us the process of transferring ownership of vehicles, and so we decided to write this article. Fortunately, it’s pretty easy and it’s only a two-step process.

Most of you who have bought/sold a secondhand car or inherited one might already know this process. So first timers, this article is for you.

 

You’ll need to pay off your loan first 

Image from GIPHY

When you sell your car, the easiest way to go about it would be to settle the outstanding loan first and then sell it for whatever price you want. This doesn’t mean you can’t sell a car that hasn’t been paid off, but it’s much simpler to do it this way.

You might think of asking the buyer to continue paying your loans, which is known as a ‘sambung bayar’ deal. But this is actually illegal, per Section 38 of the Hire-Purchase Act 1967. For one, the buyer would buy the car from you by paying the monthly loan directly to you, but the car would still legally be in your name. So understandably, this would be very risky for both parties. We have an article on other reasons why you shouldn’t be part of a ‘sambung bayar’ deal.

[READ MORE5 legal reasons you should never take part in a Sambung Bayar deal]

If you still have a lot of the loan left that’s unpaid, yet you still want to sell the car, here’s what you need to know.

Firstly, your bank might prevent you from selling the car for the first 5 years or so. To check the exact wording and duration of this clause, you need to refer to the hire purchase agreement that you signed with the bank. Secondly, what you CAN do is have the buyer take their own bank loan, and ask that bank to pay the loan directly to your bank. And if the buyer’s loan isn’t enough to cover your loan, you’ll need to top it up with cash on your own.

 

Get your car inspected by Puspakom

Image from NSTP

Once the loan has been fully paid off, the car is 100% yours and no longer the bank’s. You will then need to take it to Puspakom—the body that inspects commercial vehicles in the country. You can go to any of their branches, and you’ll need to bring the following documents with you:

However, you cannot just show up at Puspakom whenever you wish to. You’ll need to make an appointment to get an inspection slot, and you can do this only on their website.

When you’re there, you’ll need to fill in one of these borangs:

B5- for cars that have been fully paid off and where the buyer is buying the car in cash

B7- for cars that are being bought with a bank loan. In this case, BOTH borang B5 & B7 are needed

B2- ‘special inspections’ for cars that have an expired road tax for over a year. It’s best for you go with a valid road tax, but if there are special circumstances such as a deceased owner or an owner who is overseas, this borang B2 will also need to be filled.

An officer there will issue a report after examining the car. Each form (if you filled in more than one) will have its own report. Only when you have a report, can you initiate the name transfer process at JPJ.

 

Fill in the Borang JPJ K3 at a JPJ office

Image from NSTP

When you go to your nearest JPJ branch, take your borang(s) from Puspakom and your IC with you. You’ll need to fill their borang K3 once you’re there, which is the form for change in ownership of a vehicle. A fun fact about this process is that both the transferor (seller) and transferee (buyer) of the car do not need to be there at the same time. The seller can go first and do his part and then the buyer can go later. This is convenient for cases where the buyer of the car isn’t available at the time or if he’s overseas.

Once the seller has submitted the form, JPJ will take his thumbprint and issue a form or slip to him. This slip will contain the details of the seller and the buyer. The seller will need to pass this slip to the buyer.

The buyer will then take this form to JPJ and submit it there, together with the Puspakom form and original car grant. Once they have scanned his thumbprint as well, the car’s road tax and insurance will immediately get cancelled. For this reason, the new buyer is advised to get a new insurance for the car under his name, as the previous insurance would belong to the previous owner. Once the new buyer has a new insurance for the car, he can apply for a new road tax under his name as well.

After all this is done, JPJ will issue a new Vehicle Ownership Certificate to the new owner and voila, the process is complete.

 

What if the owner of the car has passed away?

Image from The Irish Times

Let’s say that you’re not the one transferring a car ownership to someone else, but you’re about to inherit or buy one from a deceased person.

For this, the first thing to look at is whether the person died with or without a will. It’s simper if there is a will of course, as your name might already be listed there if the deceased person had wanted the car to be given to you. If this is the case, the person who handles the will (know as an executor or executrix) will need to apply for a Grant of Probate from the court. This grant will allow for the transfer of any property from a deceased person to the one inheriting it.

If the person died without a will (intestate), the court will appoint someone to handle the deceased person’s property. They will then issue what is known as a Letter of Administration which will allow property to be distributed to the deceased’s next of kin. So if you’re not the deceased’s next of kin, the chances of you getting the car this way is slim. What can be done is that the car should be transferred to a family member first, and then you can buy it from that family member.

Now, with either the Grant of Probate or Letter of Administration from the court, you’ll need to repeat the same steps above. First get the car inspected by Puspakom, and then head to JPJ. At JPJ, you’ll need to have the following things:

  • JPJ K3A form – this is different from the K3 form, which is for voluntary transfers
  • the IC of the person in charge of handling the deceased’s matters
  • the deceased’s original death certificate
  • the original car grant or Vehicle Ownership Certificate
  • the Grant of Probate or Letter of Administration and the court order that comes with these documents

If you have any specific queries regarding any part of the process, you can contact JPJ via the Malaysia Government Call Centre (MyGCC) at 03 8000 8000.

Tags:
jpj
puspakom
car insurance
road tax
transfer car
car grant
car ownership
691b2141 a707 421f 8f92 2bc2c1a7f386

About the Author Mikaela A

Don't talk to me until I've had my Milo

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