Risks Of Renting Out Your Private Car And Driving One

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TAKING advantage of the recent Aidilfitri holidays, a group of seven Sudanese students rented a Proton X70 from a man in Seremban for sightseeing and later to Pantai Cahaya in Port Dickson.
Instead of parking on solid ground upon arrival, the car was driven along the sandy beach next to the water’s edge, scanning for a suitable spot to have a barbeque.
The foreign students must have been very enthusiastic, arriving at 6.00am when it was still very dark.
Their search for an ideal location came to an abrupt halt when the car was driven into the sea and got stuck in the soft sand covered by shallow sea waters a metre deep.
The police were alerted around 10.30am after receiving a photo of a beached car on Facebook. A special task force was dispatched to the location and discovered that the car had already been towed to the shore.
It is common for movies to show a vehicle being driven on a beach to depict fun and carefree life. But in real life, owners will ensure their vehicles do not come into contact with seawater. This was especially so in the previous era when vehicles were not rust proofed by manufacturers.
(Image: Facebook)Today, apart from the BYD YangWang U8 electric SUV, no other vehicle can float and navigate in water. However, the floating mode is intended for use in emergencies like floods, not for recreational water travel.
While the risks of staying in a licensed hotel and unlicensed Short Term Rental Accommodation (STRA) are quite similar, there is a big difference in renting a licensed vehicle and a private car.
I should know, having managed the car rental division of a tour company which was the pioneer car rental firm in Malaysia.
I joined in 1973 as a tourist guide and left in 1992 but returned to conduct training in 2007 when the rental fleet size had grown to several thousand vehicles.
From 1993 to 1997, I set up two car rental divisions and a car rental company and later set up yet another car rental division in 2003. In all four companies, I was designated the general manager and provided with a new Honda Accord as company car for my exclusive use.
In 2019 and 2024, I was engaged by an association to offer recommendations for the car rental industry and draft proposals to the authorities to remove antiquated rules and introduce new measures. It is in a time warp with licensed operators following rules and free-for-all for others.
I shall first address the risks faced by private car owners in renting out their vehicles. Should a customer choose not to return the vehicle, making a police report serves little purpose other than filing an official record.
It will be classified as a “No Further Action” (NFA) case because the car was not stolen. It was voluntarily handed over to the customer. Likewise, the owner will not get any compensation from the insurance company and moreover, private cars are not to be used for hire or reward.
Similarly, filing an insurance claim would be futile if a new staff member of an organisation disappeared with the company car, as it was not exactly stolen. It may be a criminal breach of trust (CBT) case but to pursue the matter, the missing culprit must first be located.
Individuals and companies that rented out unlicensed cars could be hauled up if the authorities decide to institute action. Otherwise, it will make a mockery of the law requiring authorised companies to have car rental business licence and individual vehicle permits.
The Land Public Transport Commission (SPAD) used to impound unlicensed commercial vehicles but was replaced with an agency (APAD) without enforcement powers.
(Image: The Economic Times)The proliferation of unlicensed rental vehicles was due to lackadaisical enforcement of the Road Transport Department (JPJ).
I would not dare to drive an unlicensed rental vehicle because I would be personally liable to pay compensation for causing any injury or death, as there is no insurance cover when a private car is used for hire or reward.
In the event of damage to a licensed rental car, it is usually settled professionally and amicably between the car rental company and customer, guided by terms and conditions stated in the rental agreement.
But renting a car from an individual would depend on the temperament of the owner and it could be anybody’s guess. To claim for major repairs from the insurance company, an unlicensed operator may get a relative or friend, instead of the customer, to make the police report.
If such frauds were to be discovered, all involved will be in trouble. It is simply not worth renting an unlicensed car just to save some money or for expediency.
However, it is safe for those granted a complimentary car to use, such as victims of the recent Putra Heights fire, as these private vehicles are not being used for hire or reward.
Remember, should you borrow or lend a car, make sure no transaction is involved, not even a token sum.
YS Chan is master trainer for Mesra Malaysia and Travel and Tours Enhancement Course and an Asean Tourism Master Trainer. He is also a tourism and transport business consultant.
The views expressed are solely of the author and do not necessarily reflect those of  MMKtT.
- Focus Malaysia.

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