Okaz

When the system of buying cars on installments was introduced several decades ago, it became a must for everybody wanting to buy a car on installment to bring a guarantor who would be obligated by law to pay if the purchaser was to default on his payments.

With time, this method proved ineffective in protecting the rights of car companies. The system was abused when purchasers and guarantors began selling their vehicles and then disappearing. If caught, they would go to jail for a while but would then be let out with a special court order because of their inability to pay, or they would remain in jail for a while waiting for a kind man to come forward and pay off their debt.

After a while, car companies came up with the lease payment system in which purchasers pay installments, but the car remains in the name of the company and the purchaser pays rent until all of the payments are made. Monthly payments are considered rent for using the car. When all payments are made, then the ownership of the car is transferred to the new owner. If the buyer did not wish to complete the purchase, then the company has every right to evaluate the value of the car and resell it.

Many people object to the system of towing away cars without the knowledge of the buyer if he is late in making payments. Some buyers say that this is injustice as how will they be able to take their children to school and engage in their other day-to-day activities. This also adds pressure on the courts.

So far, all solutions when it comes to buying and selling cars do not seem to work. Does the Ministry of Commerce have an answer, or will the confusion continue?