LTO-7 welcomes DTI policy against giving installment only option to vehicle buyers

LTO-7 Regional Director Victor Caindec | CDN Digital file photo

CEBU CITY, Philippines — The Land Transportation Office in Central Visayas (LTO-7) welcomed the new policy of the Department of Trade and Industries (DTI) disallowing the sellers of vehicles from giving buyers only an installment option to buy the vehicles.

The DTI released Administrative Order No. 21-03 that prohibits a person or company engaged in the sale or offer for sale of consumer products and services from imposing an “installment-only” mode of payment to consumers.

“Consumers shall be given the option to pay in cash, in installment, or a combination thereof. Denial of the right on the consumer to pay in cash shall constitute a prima facie violation of Article 52 on the Consumer Act. Provided that the seller is not precluded from offering a discount on the selling price if payment is made in cash.”

“Provided further, that the selling price shall remain the same whether the mode of payment is through delivered prepaid cards, QR codes, electronic fund transfers or other digital means that are available to consumers,” rea AO No. 21-03 Section 2.

Furthermore, for those who will opt for the installment, the AO states that no interest shall be imposed unless expressly stipulated in writing in accordance with Article 1956 of the Civil Code and provided that the seller shall not impose an interest rate more than the market oriented interest rate.

Provided further, that the creditor or seller shall not collect advance interest for a period of more than one year. The seller shall likewise inform the buyer of other fees or charges due. 

As for the release of documents of ownership, the AO states that the seller shall provide the purchaser with a copy of the “instruments executed by the parties evidencing the transaction and, where applicable, delivers the document evidencing ownership authenticated by the proper government office/agency.”

Should there be a circumstance when the seller must repossess the property sold under installment, the seller must comply with the requirement of due process as set forth under applicable laws in repossessing any product purchased on installment.

LTO-7 Director Victor Caindec, who has been going after motorcycle dealers who allegedly refused to release ownership documents to their buyers and even submitted false documents to the digital registration portal of the agency, welcomed this policy.

In a statement, he said that the policy would protect the consumers’ rights, especially when purchasing motorcycles or vehicles.

“This order by the Department of Trade and Industry, alongside the findings of the honorable Senate Blue Ribbon Committee headed by Senator Richard Gordon, highlights our revelations on motorcycle dealer malpractices which put at a disadvantage, ordinary Filipino motorcycle buyers.”

“No longer are ordinary Filipinos held captive by unfair and insensitive ‘in-house financing’ schemes by unscrupulous dealers, but this also allows the entire motor vehicle industry to benefit from a more dynamic market financing landscape,” said LTO-7 Chief Caindec.

He said that this should serve as a lesson and warning to those, who would try to take advantage of the desperation of people in “dire need of motorcycles as a means for mobility,” and that government would work in unison to protect the interests of its citizens.

/dbs

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