Big savings ahead: the hire purchase amendment Bill 2026 and your car loan in Malaysia

Great news for millions of Malaysian motorists! The upcoming implementation of the Hire Purchase (Amendment) Bill in 2026 marks a significant step towards greater financial fairness.

This landmark reform will see banks introduce a "goodwill discount" for customers who choose to settle their existing, fixed-rate car loans early.

This change is especially crucial for anyone looking to Sell Car or contemplating a new purchase. For years, the flat-rate interest calculation, often using the 'Rule of 78' method, meant minimal savings on early settlement. The amended Act—and the accompanying banking initiative—is set to change that, offering a fairer deal for consumers who pay off their debts sooner. Understanding this update is key whether you want to sell used car or are in the market to buy used car Malaysia.

The New Law: Fairer Rebates for Early Settlement

The core of the Hire Purchase (Amendment) Bill 2026 is the shift away from older, less transparent interest calculation methods.

Abolishing the Rule of 78: A Win for Consumers

Historically, the Rule of 78 front-loaded the interest charges, meaning you paid most of the interest at the beginning of your loan tenure. This drastically reduced the rebate you received when you chose to settle early.

The new law abolishes this method for future hire-purchase agreements, replacing it with a more equitable, reducing-balance approach.

The "Goodwill Discount" for Existing Loans

Recognising that millions of Malaysians are currently tied to older agreements, the banking industry has announced a 'goodwill discount' initiative. This discount will be applied when customers settle early on their existing fixed-rate agreements signed before the new Act's effective date (expected in Q1 2026).

This means that if you are looking to sell car and clear your existing loan, you are likely to enjoy a more substantial rebate on the remaining interest than before. This immediately improves your cash flow and makes the decision to buy-sell cars more financially attractive.

Strategic Moves: Selling Your Car Under the New Rules

The early settlement discount presents a golden opportunity for car owners. If you were delaying your decision to sell used car because the early settlement penalty was too high, now is the time to act.

Maximising Your Sale Profit with Accurate Car Valuation

Knowing the true worth of your vehicle is the first step. You need an accurate car valuation to ensure you get the best price when you sell car. With the increased rebate potential, your outstanding loan amount will be lower, directly increasing your net profit from the sale.

• Online Car Valuation: Use reliable platforms to get a quick and free estimate. A good online car valuation tool gives you a strong starting point for negotiation.

• Check Car Valuation Price: Getting a transparent, accurate price is non-negotiable before you put your car on the market.

By securing a better early settlement rebate and getting a high market-rate offer, you can maximise the returns when you decide to sell car through a reputable car buying service.

Smart Buying: Finding Your Next Vehicle

The reform doesn't just benefit sellers; it also creates a more dynamic market for those who want to buy used car. As more people are encouraged to sell car and upgrade, the pool of quality used vehicles increases.

Confidence in the Used Car Buying Service

When you are ready to buy used car Malaysia, look for a trustworthy used car buying service that offers transparent histories and thorough inspections. Whether you choose a private seller or a dealer, the new Hire Purchase Act ensures that your future loan will have a fairer, more transparent interest structure from day one.

Driving Smarter: Essential Tools for Malaysian Motorists

As you navigate the exciting world of buy-sell cars and prepare for the 2026 changes, safety and efficiency on the road remain paramount. Staying informed about traffic conditions is essential for daily commutes, road trips, and even for bringing your vehicle for inspection before you sell car.

Real-Time Traffic Information

In a country where traffic conditions can change rapidly, having instant access to live updates is invaluable. The Automated Awareness Safety System (AWAS Camera Malaysia) and other Speed Camera Malaysia systems are deployed nationwide to ensure road safety. Knowing where these systems are—and checking live feeds for congestion—can save you time and help you avoid unnecessary delays or fines.

• Check Traffic Cameras or AWAS Cameras: Use a reliable motoring app to view live Traffic Camera Malaysia feeds. This helps you plan your journey and maintain safe speeds, especially through monitored stretches.

Frequently Asked Questions (FAQ)

1. Who is eligible for the new 'goodwill discount' on car loans?

The goodwill discount applies to individuals and micro/small businesses with existing fixed-rate hire-purchase agreements signed before the Hire Purchase (Amendment) Act 2026 takes effect. The account must not be significantly overdue or under legal action at the time of early settlement.

2. How will the new law affect the process when I want to Sell Car?

When you Sell Car, you need to clear your outstanding loan. The new goodwill discount for early settlement will reduce the final amount you owe the bank. This means a lower settlement figure, which directly translates to a higher net profit in your pocket from the sale. It makes the decision to sell used car more financially rewarding.

3. How can I get an accurate Car Valuation for my vehicle?

You can use a free Online Car Valuation tool provided by professional car buying service platforms like Motorist. By entering your vehicle's details (make, model, year, mileage), you receive a market-based estimate, allowing you to check car valuation price accurately before you decide to sell car.

4. Are the AWAS Camera Malaysia point-to-point systems currently active?

While the government is implementing and replacing older systems, the point-to-point speed monitoring feature of AWAS Camera Malaysia is still in the pilot testing phase and is not yet fully active for enforcement nationwide. However, all existing fixed-point Speed Camera Malaysia and traffic light cameras remain operational. It is always safest and wisest to drive within the legal limits.

Take Control: Sell, Buy, and Drive Smarter with Motorist Malaysia

The Hire Purchase Amendment Bill 2026 is empowering Malaysian motorists with fairer financial terms. Now is the time to leverage these changes to your advantage, whether you’re ready to sell car or buy used car.

Motorist Malaysia is your one-stop solution to navigate the entire car ownership journey with confidence.

• Ready to Sell Used Car? Get the highest price with zero hassle. Our transparent and efficient car buying service connects you to a wide network of verified dealers, ensuring you get the best offer for your vehicle quickly. We handle all the paperwork, making it easy to sell car and benefit from your lower early settlement fee.

• Need a Free Valuation? Use our instant, no-obligation Online Car Valuation tool to check car valuation price accurately in minutes. Know your car's true market worth before you list it.

• Buying a Used Car Safely? Browse certified, high-quality vehicles and secure a fantastic deal. We offer the best used car buying service for those looking to buy used car Malaysia with peace of mind.

• Check Traffic Cameras or AWAS Cameras? Stay updated and drive safely. Our Motorist App provides real-time updates for Traffic Camera Malaysia and AWAS Camera Malaysia locations, helping you plan your route and avoid jams.

Visit Motorist Malaysia today to Sell your car via our transparent platform, Buy a used car safely, and Check Malaysia's traffic cameras (AWAS/speed cameras) with our powerful app!

Read More: Yes, you can sell your car even If It has an existing loan! here’s how to do It

Download the Motorist App now. Designed by drivers for drivers, this all-in-one app lets you receive the latest traffic updates, gives you access to live traffic cameras, and helps you manage vehicle related matters.