KUALA LUMPUR: It is against Malaysian law for new and used car dealers to offer "zero down-payment" promotions to customer, said Selangor's Domestic Trade, Cooperatives and Consumerism Ministry chief enforcement officer Azman Adam.
He added that the tactics used by these car dealers were simply to gain profit and manipulate customers.
The promotion would attract more buyers as they do not have to fork out 10 per cent of the vehicle's price.
"Some of the car dealers were detected manipulating prices through the car features before offering a non-deposit purchase method to customers. If the buyer is able to pay the 10 per cent deposit of the vehicle's price, it shows the buyer's capability to service the monthly repayments, and it helps to reduce their monthly commitments.
"On top of that, the 10 per cent down-payment helps the buyer to avoid being blacklisted or to be declared bankrupt should the monthly repayments become too costly to bear," said Azman at a press conference in his Shah Alam office today.
Azman said that companies that do not comply with the regulations may be liable to action under Section 31 (1) of the Hire-Purchase Act 1967.
In the recent "Ops 0% Down-payment" conducted statewide on March 5, 11 out of 35 car dealers in Selangor were found not billing the 10 per cent deposit to their customers.
"The operation was carried out after finding that the offer of non-deposit purchases was increasingly widespread to attract profits.
"As a result of the operation, we found 11 companies breaching the rules for not taking deposits less than 10 percent.
"All the companies that violated the rules were ordered to stop promoting the 'zero down-payment' advertisement, while further investigations are still in progress," Azman said.