Motor vehicle buyers allowed to cash – DTI
The Department of Trade and Industry will require motor vehicle dealers to allow outright cash mode of payment as an option amid complaints that buyers are forced to pay on installment basis only where interest rate is usuriously high.
DTI Secretary Ramon M. Lopez said at the Senate hearing by the committee on accountability of public officers and investigations or the Blue Ribbon chaired by Senator Dick Gordon that DTI will come out with a Department Administrative Order (DAO) or a Joint Memorandum Circular (JMC) to address complaints on installment payment basis only in the purchase of all kinds of motor vehicles.
Aside from the high cost of motorcycle ownership, the Senate committee hearing also tackled crimes perpetuated by motorcycle-riding assailants.
“There must be a choice, if a consumer wants to pay in cash, this must be allowed,” Lopez said adding that DTI has received reports of buyers being encouraged and the installment payment mode is enforced by dealers.
He even said that cash payment should have no interest and payment should be discounted instead. He said that a 5 percent interest rate is illegal. Usually, the monthly interest rate is only 3 percent especially when using a credit card.
To date, the DTI has received 3,060 motorcycle sales related complaints, including non-release of car registration and official receipt (ORCR) if the installment payment is not yet completed and defective units. The bulk of the complaints are on delayed issuance of ORCR. Of this number, 287 cases had been resolved through mediation by the Fair Trade Enforcement Bureau.
Lopez could only surmise that motorcycle dealers are accepting installment basis payments only because they get incentives from the banks or the financing institution. In addition, he said, installment facilitates the easier acquisition of motorcycles or even cars.
Lopez also said they will also review the “promissory note” that dealers normally asked buyers to sign in their purchase. The “promissory note” by one of the big motorcycle dealers in the country as shown by Gordon has spelled out the penalty of 5 percent interest per month computed from their due dates and the repossession of their units.
The DTI legal will have to review the “promissory note” and the stipulations under the planned issuance of a DAO or JMC, Lopez said.
On the non-release of ORCR, Lopez said that buyers must have at least a copy of the authenticated documents.
The Department of Transportation has recorded 7.3 million motorcycle units in their current registration and 5 million in the process of renewal or not registered.