The process of replacing Nagakanni's Bezza far from straightforward, says lawyer

KUALA LUMPUR: The process of replacing a new vehicle for Nagakanni Subramaniam after her Perodua Bezza broke down within eight hours of delivery is far from straightforward, said lawyer Asiah Abd Jalil.

She said the process is lengthy as it involves three agreements signed by Nagakanni, namely the agreement between the buyer and Perusahaan Otomobil Kedua Sdn Bhd (Perodua); the buyer's agreement with the bank; and the buyer's agreement with the car insurance company.

She said all agreements involve a car with specific chassis and engine numbers.

Asiah said replacing the new car for Perodua is not as simple, given that the alleged sugar in the engine car's bank loan needs to be terminated.

The new car, she said, must be registered under Nagakanni's ownership before disposing of the damaged car.

"If Perodua finds that the car was severely damaged because of the sugar found in the engine, the insurance company will step in to assess. If the insurance company finds that the damage exceeds economical repair, they will declare the car a 'total loss'.

"Subsequently, the insurance company will settle the entire balance of the loan for the car with the bank.

"For the new car replaced by Perodua, Nagakanni needs to initiate all processes anew. This includes applying for a new loan, signing new agreements, and registration, all with new chassis and engine numbers," she said in a Facebook post.

Asiah said there are five components involved in owning a vehicle: ascertainment, hire-purchase, merchantable quality, warranty and guarantee, and risk transfer.

"The sale of a car is regulated by contract law and the Sale of Goods Act. When the sale agreement is signed by Perodua with the buyer and the car with a unique chassis and engine number is registered with the Road Transport Department (JPJ) under the buyer's name, the 'ascertainment' process takes place.

"This causes the car with the unique chassis and engine number to now transfer ownership fully to the buyer. This 'ascertainment' means the buyer can no longer exchange the finalised car," she added.

For the hire-purchase component, she said, buyers usually pay a deposit of at least 10 per cent of the car's price, while the remaining 90 per cent is through a bank loan.

Therefore, she said, the buyer will sign a hire-purchase agreement with the bank to pay the remaining car price to Perodua and then lease it to the buyer.

"Every month, the buyer will make installment payments to the bank. It is as if the buyer is renting the car from the bank. If the buyer completes full payment of the loan to the bank, the car is considered fully purchased. The bank will release the lien on the car," said Asiah.

For the merchantable quality component, she said that when a buyer purchases a new car, the law stipulates that the car must have merchantable quality, like a new car straight from the factory.

"A new car is not the same as a used car. A new car must have no defects and no issues. Users have the right to expect that a new car must be of the same quality as other new cars," she added.

Asiah said that usually, in every sale agreement for new goods, there will be a warranty or guarantee for defective products.

"Usually with a time limit or certain conditions. For example, a guarantee for a car within six months after purchase or 5,000 kilometres, whichever comes first, can cause defects to arise during its design, production or marketing.

"Whether these defects are intentional or not, known or unknown, the seller must bear liability and replace the defective item," she said.

For the risk transfer component, she said when the seller physically hands over the car, the buyer needs to inspect it first to ensure there is no damage.

"As soon as the physical handover is completed, the risk for the car now transfers to the buyer. Perodua, as the seller, has completed its responsibility except for warranty and guarantee responsibilities," she added.

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