Trade department mulls order vs installment-only vehicle payment schemes

THE Department of Trade and Industry (DTI) may draft an order against installment-only payment schemes for vehicles, including motorcycles.

Consumers must have the choice to pay either the full amount in cash to avoid interest or by installment, Trade Secretary Ramon M. Lopez said during a Senate hearing on Monday.

The DTI has received reports that dealers are encouraging consumers to buy vehicles only on an installment basis, he said. Mr. Lopez added that vehicle dealers should inform the buyers of other options.

In a separate mobile message to reporters, Mr. Lopez said the DTI will conduct a legal review on the matter, after which it could issue a department order or circular, depending on what the law allows.

Mr. Lopez said it is possible that dealers get incentives from financial institutions for insisting on installment-only payment schemes.

“Also, installment facilitates the easier acquisition of motorcycles or even cars,” he said.

Senator Richard J. Gordon said during the hearing the dealers implement installment-only schemes to compete against other dealers that use the same process.

“Bakit ayaw tumanggap ng cash? Babayaran ng tao. Karapatan ba ng dealer na ’di tatanggap ng cash? Ibig sabihin may pinaplanong masama ’yan, (Why won’t they accept cash that people would pay? Is it the dealer’s right not to accept cash? This means they’re planning something bad),” Mr. Gordon said, explaining that those who pay by installment and are unable to pay are forced to restart the payment process.

Those who are willing to pay by cash and in full should be able to do so, the senator said, and should not be required to pay by installment.

The DTI’s fair trade enforcement bureau has received 3,060 consumer complaints relating to motorcycles, Mr. Lopez said, citing reports about defective units and vehicle sales under installment-only schemes.

Around 287 of the consumer complaints have been resolved through mediation, he said. The bulk of the complaints, including those on delays in releasing receipts and certifications relating to plate numbers or transfer of registration or insurance, have been raised with the Land Transportation Office.

Mr. Gordon on Monday led the Senate Blue Ribbon Committee hearing on Alleged Malfeasance and Nonfeasance in the Implementation of the Motorcycle Crime Prevention Act, which probes an alleged delay of the law’s implementation.

Republic Act 11235 was passed in 2019 to protect citizens against crimes done by people on motorcycles by making number plates larger and more readable by witnesses, even from a distance. — Jenina P. Ibañez