Abstract
Purchasing motor vehicles with instalment (credit) is currently becoming favourite choice by many people including people who live in plantation and agriculture area. There are several reasons, such as easy pre-requirements, low down payment and saving time. The financing institutions that generally deal with motor vehicle credit are financing companies and banks. Although, they are different in their operational legal basis, in practice, financing company and bank fall under the category of fiduciary warranty agreements. This study focus on the potential fraud on law in financing of capital goods. This study used the normative and empirical legal research methods. In the end of the study, it found that it used loan financing with fiduciary guarantee not a lease agreement. As a consequence, the use of fiduciary warranty by financing company in a lease does not accord with the law and considered to be illegal. Last but not least the study found that Ministry of Finance and the Financial Services Authority (Otoritas Jasa Keuangan/OJK) as supervisory agencies financing business must to ensure law enforcement, certainty and effective oversight. OJK should provides sanctions for financing companies which do not comply in accordance with the legal provisions.
Highlights
The increasing public need for motor vehicles either as a private transportation or as a main vehicle for working has driven a high public interest to own a motor vehicle
Based on the facts above, this research conducted to respond to the following questions: a) Why leasing companies are able to use fiduciary warranty for motor vehicle in their leasing practice? b) What is the legal consequence of the fiduciary warranty agreement made by the motor vehicle leasing companies?
It is clear that fiduciary (Fidusia Eigendom Over dracht) is a transfer of ownership based on trust.[20]
Summary
The increasing public need for motor vehicles either as a private transportation or as a main vehicle for working has driven a high public interest to own a motor vehicle. Commercial bank can provide services in the payment transactions.[3] On the other hand, leasing is a financing activity in the form of capital goods provision either under an optional lease (finance lease) or a non-optional lease (operating lease) to be used by the Lessee for a specified period of time on a periodical basis.[4] They both have similar role, they differ in their legal basis in terms of regulation and procedures for vehicle acquisition. The down payment, here in after referred to as Down payment (DP), is a prepayment or advance cash to buy a motor vehicle on credit This fund originates from the debtor (self-financing) and is set at least 25% (twenty five percent) for the purchasing of two-wheel vehicle and 30% (thirty percent) for the purchasing of four-wheel vehicle for non-productive purposes.[11] This rule applies to both leasing companies and banks. Based on the facts above, this research conducted to respond to the following questions: a) Why leasing companies are able to use fiduciary warranty for motor vehicle in their leasing practice? b) What is the legal consequence of the fiduciary warranty agreement made by the motor vehicle leasing companies?
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