A senate committee has been formed in order to address a multitude of issues facing the registration process of motorcycles in the Philippines. Particularly, the issues plaguing the implementation of Republic Act No. 11235, or the Motorcycle Crime Prevention Act. Interestingly, the probe of the newly established senate committee has unearthed yet another glaring issue in the local motorcycle industry. 

As it would turn out, there are multiple motorcycle dealerships across the country which are guilty of financing-only sales schemes. This means that they outright refuse to accept cash payments from customers, even those who willingly ask to pay for their new bikes in cash. Instead, they force their customers to avail of financing packages which usually come with whopping interest rates no less than five-percent per month. Additionally, video evidence of motorcycle owners having their motorcycles repossessed due to failure to make a monthly payment was presented during the hearing.

The committee stressed that the act of repossessing a motorcycle simply due to a missed payment is unethical, and that the dealerships must first get in contact with the motorcycle owner to discuss other ways of settling the balance. On top of this, Senator Richard Gordon, the head of the senate committee, highlighted a concern regarding dealerships forcing customers to sign promissory notes, which subsequently grants the dealer the authority to repossess a bike without question.

As a result, motorcycle buyers who miss a payment simply because they forgot to deposit the monthly cheque, or make the online transfer, run the risk of having a repo man knocking on their door. These repossessed bikes are allegedly used as demo units for customers to try out, prior to being forced into the same cycle of financing-only sales schemes. To address this problem, the senate committee, in cooperation with the Department of Trade and Industry (DTI), will be issuing a department order outlawing this practice. Instead, motorcycle dealers must offer both cash and financing options to their clients. 

The senate committee hearing also pushed for a major increase in the penalty for motorcycle dealerships who employ such malpractice. For reference, the current fine for unfair motorcycle sales practices ranges from PHP 500 to PHP 10,000, or $10 to $200 USD—an amount easily recouped from the financed sale of just one low end moped. 

 

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