Hire-Purchase Bill 2025 Seeks Fairer Consumer Protection

Samuel Chua

7th October 2025 - 2 min read

The Hire-Purchase (Amendment) Bill 2025, which aims to provide fairer terms for consumers under hire purchase agreements, has been tabled in the Dewan Rakyat.

Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said the bill’s second reading will take place during the current parliamentary session.

Bill Aims To Strengthen Consumer Fairness In Hire Purchase Agreements

The proposed amendments seek to improve protections for consumers entering hire purchase agreements, particularly in how term charges, or financing costs, are calculated.

The existing method of calculating term charges will be replaced with a fairer and more transparent approach to ensure consumers pay rates that better reflect current market conditions.

Streamlining Term Charges And Introducing Reference Rates

Among the key changes, the bill proposes to streamline the maximum limit for term charges, covering both fixed and variable rate hire purchase agreements.

It also introduces the definition of a “reference rate”, which will serve as a benchmark interest rate for variable-rate financing. This rate will be based on the prevailing Overnight Policy Rate (OPR) as determined by Bank Negara Malaysia in its Monetary Policy Statement.

Supporting Technological Adoption And Regulatory Updates

The bill also includes provisions to enable the use of digital technologies in executing hire purchase agreements, allowing for more efficient and accessible processes.

Additionally, several outdated terms and provisions in the Hire-Purchase Act 1967 will be updated to reflect current regulatory standards and modern technological developments within the financial and automotive sectors.

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