How Are Cars Divided in a Malaysian Divorce?

Who really owns the car?

Start with the registration card, called the geran. It names the registered owner at JPJ, but that may not be the person who paid for the car or drives it.

Under Section 76 of the Law Reform (Marriage and Divorce) Act 1976, what matters is whether the vehicle is a matrimonial asset. A car, motorcycle or other vehicle bought during the marriage usually is. List every vehicle, its registered owner and who actually uses it.

The hire-purchase loan comes first

Many cars are still on a hire-purchase loan when a marriage ends. Until it is fully paid, the bank or finance company effectively owns the car, and the registered person is the borrower. You cannot simply hand the car over.

To change ownership at JPJ while a loan is outstanding, you need the financier’s consent. Usually the loan must be settled, or refinanced in the new keeper’s name, first. Ask your bank early what it allows.

How is a vehicle valued?

Use today’s market value, not the price you paid. Cars lose value quickly, and condition, mileage, model year and accident history all affect the figure.

Online car guides and listings for the same model give a rough figure. A dealer’s trade-in quote is firmer. If the value is disputed or the car is expensive, an independent valuation is worth it.

Ways to divide a vehicle

• One spouse keeps it and takes over the loan, road tax and insurance, often balanced against another asset.
• Sell it and split what is left after paying off the loan.
• One keeps driving while the other stays on the loan. This is risky and best avoided.

Whatever you choose, put in writing who pays the instalments. Verbal deals fall apart quickly.

Completing the transfer

1. Settle or refinance the hire-purchase loan and get the financier’s release.
2. Transfer ownership at JPJ. This usually needs both parties and a Puspakom inspection.
3. Move the insurance into the new owner’s name and check the road tax.

Insurance follows the registered owner, so an outdated policy can leave the wrong person exposed after an accident.

Documents to gather

• the geran, showing the registered owner
• the hire-purchase agreement and recent loan statements, showing the balance and who is liable
• the insurance policy, showing cover and named drivers
• records of who paid the deposit and monthly instalments, which help show each spouse’s contribution

Common mistakes

The most damaging is letting one spouse drive a car that is still in the other’s name and loan. If payments stop, it is the borrower’s credit record that suffers.

Also avoid selling a car you both use without the other’s consent, and relying on a handshake deal about payments.

Looking to engage a divorce lawyer? If you are unsure how to deal with a car still under loan or who should keep it, request independent lawyer contact via WhatsApp: Request Lawyer Contact. For general information, use our guides and tools.