What is the process of changing car ownership in Malaysia?
We have previously talked about how to transfer ownership of properties in Malaysia when someone has passed away. The steps are simple and straightforward. But what about changing ownership of cars in Malaysia? Especially when it involves the car owner having passed away already.
To be fair, changing the name of ownership on a car grant isn’t as difficult as some people made out to be. It may have a bit more steps when it was originally owned by a deceased person. However, the steps aren’t as complicated as it seems.
How do we do it then?
Assuming that the car owner is alive, things will be a bit easier and straightforward. If you have dealt with this before, you’d know. However, if you’re new to this whole thing, then this is for you.
Car owners have to pay off the car loan first
Before the car owner can sell their cars, they will first have to pay off the car loan. As soon as the car owner has settled whatever outstanding loan there is, they can sell it for whatever price they want.
Sometimes, some car owners rather sell their cars before they have paid off the outstanding loan. It is commonly known in Malaysia as “sambung bayar”. This is actually illegal under Section 38 of the Hire Purchase Act 1967. These “sambung bayar” schemes usually have issues and legalities surrounding it. You can read more about it here in this article.
If the car owner still wants to sell their car that is still under bank loan, then there are a couple of specifics everyone involved should know.
Firstly, the loaning bank may prevent the car owner from selling the car for the first 5 years or so. Check the clauses in the hire purchase agreement thoroughly.
The other alternative is to take your own bank loan on the same car. You can ask the car owner’s bank to pay the loan directly to your bank. If your loan isn’t sufficient to cover the car owner’s loan, then the car owner will need to top it up with cash of their own.
Get the car owner to have the car of interest be inspected by Puspakom
When the car loan has 100% been paid off, the car owner will need to take it to Puspakom for inspection. Puspakom is the Malaysian organization that inspects commercial vehicles in the country. Car owners can go to any of the branches and bring with them the following documents:
- Their MyKad Identification Card
- The original car grant or Vehicle Ownership Certificate
People cannot show up to any of the Puspakom branches whenever they like. They will need to make an appointment to get an inspection slot. You can only do this on their website here.
They have a few forms for you to fill in. Take note of which one the car owners will need to fill in.
- B5 – cars that have been 100% paid off and buyers are buying the car in cash.
- B7 – for cars that are bought with a bank loan. Besides needing this B7 form, you will also need the B5 form.
- B2 – this is a “special inspection” form for cars that have expired road tax for more than 1 year. It is advisable for you to take the car to Puspakom with a valid road tax (if you are the car owner). If the car owner has passed away or is overseas, then this B2 form is needed.
After the Puspakom officer has completed examining the car, they will issue a report. For every different type form you’ve filled in, you will get a report for each. As soon as you have received a report, only then can you start the name transfer process at JPJ.
Fill in a JPJ K3 form at a JPJ office
Next, you will need to go to the nearest JPJ branch with your Puspakom forms and IC. Fill in the K3 form at JPJ (ask their officers for help if you need it). The K3 form is the form to change the ownership of a vehicle.
The car owner and the buyer need not to be there at the same time simultaneously, which is a good thing. The car owner will have to go first to do their part. Then the buyer can go later on. This is convenient in a sense that sometimes the buyer may not be around when the car owner is selling their car.
As soon as the seller has submitted the K3 form, JPJ will take the seller’s thumbprint and issue a form for him/her. The slip will include the details of the seller and the buyer. The seller will then need to pass the very same slip to the buyer.
Next, the buyer will take the same slip to JPJ and submit it together with the Puspakom form and original car grant. The buyer will have his/her thumbprint scanned. Then the car’s road tax and insurance will immediately be canceled.
For this very reason, the new buyer is advised to get new insurance for the very same car he is buying under his own name. When the buyer has new insurance for the same car, he can apply for a new road tax under his name too. When this part is completed, only then will JPJ issue a new Vehicle Ownership Certificate to the new owner.
If the original car owner has passed away…
If you have found yourself in this situation, the first thing you should do is to check if the vehicle is included in any wills or trusts or not. It’s easier if there is already a will in place that includes the beneficiaries who will inherit that car. If it’s already promised to someone else, then you cannot have it. Unless the inheritor does not mind selling it to you, then refer above for the necessary steps.
If the car belongs to your parents and they have included the car in the same will, then look out to see who will inherit the same car. It could be you or your siblings (or anyone else). If the same car is given to your sibling and you wish to have it, perhaps you can work things out and buy it from your sibling. The same steps extrapolated above are the same steps you should follow when you buy the vehicle your sibling has inherited.
Key Takeaway
Transfer of car ownership from a deceased person does not need to be so difficult. As long as you have all the necessary documents in place, it should be fine for you.
