DOHA: The Traffic Department will discontinue registering vehicles bought with bank loans in the name of lending institutions, from early next year.
Such vehicles will instead be registered in the name of the buyer directly, a local Arabic daily reported. This means that for registration purpose, the traffic authorities will not take cognizance of hypothecation—whether the buyer is an individual or a company.
Once the new system is in force, buyers of vehicles that are taken on loan and hypothecated to banks and financial institutions will have to change the ownership.
They will need to provide details of the loans taken and repayment schedules with documentary proof, after which a vehicle’s registration will be changed.
Under the current system, the road permit mentions if a vehicle has been bought with loan from a bank or a financial institution.
And once the loan has been repaid the buyer must get back to the bank and seek a clearance certificate to get the vehicle registered in his name. Such complexities in the registration process with regard to vehicles bought with bank loans would be removed once the new system is implemented from the start of 2015.
Banking sources said car loans could now be given by banks as personal loans where the salary of the borrower transferred is the only guarantee of repayment. Car dealers, on the other hand, said the new system would likely make automobiles more expensive.
The automobile sector is the second after real estate that has been booming and it would be hit by inflationary pressure due to the new registration system being introduced. A national told Al Sharq that lenders would suffer under the new system as people could run away with cars bought with bank loans.
The new system would, though, make it easier for people crossing the border by road in their cars as they wouldn’t need to produce authorisation letters from banks and the traffic department.
The Peninsula
