Public Bank vs Hong Leong Car Loan Malaysia 2026: Hire Purchase Rates & Honest Verdict

Hong Leong Bank wins this matchup on flat rate — 2.30% versus Public Bank's 2.45% — saving roughly RM 840 in total interest on an RM 80,000 / 7-year hire purchase. But the rate is the easy part. Once you factor in dealer pipeline, used-car margin, Islamic option depth, and the early-settlement reality, the right answer depends on which problem you are actually solving. And 14 days from this publish date, the Hire-Purchase Amendment Act 2025 changes how the rate itself is calculated.

Short answer: If you are a rate-first new-car buyer with no existing relationship at either bank, take Hong Leong Auto Loan at 2.30% flat — it matches Maybank's headline rate and beats Public Bank by 0.15 percentage points. If you bank with Public Bank already (savings, fixed deposit, Public Mutual, or PB Visa Platinum for 2+ years), the relationship-scored Public Bank quote often closes that gap or beats it, and the dealer pipeline advantage is genuinely useful for Proton, Perodua, and Toyota purchases. If you are buying a reconditioned car, HLB's 2.50% flat versus PBB's 2.80% saves real money. If you want a halal-compliant product, Public Bank Aitab Hire Purchase-i is the cleaner pick — HLB has no equivalent marketed product in 2026.

Ready to compare? RinggitPlus pulls a live quote from both banks (plus four more) in one form, no CCRIS hit, no commitment.

Side-by-Side: Public Bank vs Hong Leong Hire Purchase

Rates as of May 2026. Final rate depends on credit profile, employer category, vehicle model, tenure, and existing banking relationship. Pre-HPAA rates apply to agreements signed on or before 31 May 2026. From 1 June 2026, both banks transition to reducing-balance EIR per the Hire-Purchase Amendment Act 2025. Sources: Public Bank Hire Purchase review, Hong Leong Auto Loan review, and the RinggitPlus car loan aggregator; cross-checked against HLB Auto Loan PDS April 2026 and Public Bank Aitab-i listing.

Where Hong Leong Pulls Ahead

1. Cheaper headline rate — by enough to matter

HLB's 2.30% flat on a new car beats Public Bank's 2.45% by 0.15 percentage points. On an RM 80,000 / 7-year loan that compounds to roughly RM 840 in additional total interest if you sign with Public Bank — about RM 10 a month over the life of the loan. Not life-changing, but enough that it should require a real reason (relationship scoring, dealer pipeline, Islamic compliance) to override.

2. Reconditioned car rate — 0.30pp lower

If you are buying a Japanese reconditioned import (Toyota Vellfire, Alphard, Harrier, Honda Stepwagon), HLB quotes 2.50% flat versus Public Bank's 2.80%. On an RM 80,000 recond Vellfire over 7 years, that 0.30 percentage-point gap saves roughly RM 1,680 — a meaningful difference for the recond buyer profile, which often skews price-sensitive.

3. Explicit no-early-settlement-penalty

Hong Leong's Auto Loan PDS explicitly states no early repayment penalty — a rare and useful guarantee. Public Bank does not advertise the same explicit no-penalty stance on conventional HP. In practice, both banks apply Rule of 78 to pre-HPAA conventional loans, which front-loads interest so the rebate after year 3 is modest. But HLB's published commitment removes the discretionary admin-charge risk that some banks apply quietly at settlement.

4. Age limit to 70 — meaningful for older borrowers

HLB lets the loan run to age 70 at end of tenure; Public Bank's standard cap is 65. For a 55-year-old wanting a 9-year tenure to keep monthly repayments manageable, HLB allows it; Public Bank would compress tenure to 6-7 years and lift the monthly instalment by roughly RM 350 on an RM 80,000 loan.

5. Variable rate option and Industrial Hire Purchase

HLB is one of the few Malaysian banks still offering a Variable Rate Auto Loan pegged to its Base Lending Rate — useful if you believe BLR is heading down. HLB also has an Industrial Hire Purchase (IHP) tier specifically for sole proprietors and SMEs buying commercial vans, pickups, or fleet vehicles, with rates from 2.60% flat. Public Bank handles commercial vehicles case-by-case but does not have a separately marketed SME-tier product at the same depth.

Where Public Bank Wins

1. Dealer pipeline — the unseen advantage

Public Bank's 260+ branches concentrate in Chinese-majority commercial areas where car dealers have decades-long relationships with specific PBB branch officers. The Proton, Perodua, and Toyota dealer panels frequently pre-screen your application before you formally apply — often delivering approval-in-principle within hours rather than days. If your dealer says "PBB is faster for us", that is the pipeline effect at work, and it is hard to replicate at HLB without an existing salary-crediting relationship.

2. Used-car margin — higher financing on older vehicles

Public Bank generally offers up to 80-85% financing on used cars across the age band, including 6-10-year-old vehicles where HLB caps margin at 70%. On an RM 50,000 used 8-year-old Honda Jazz, PBB's higher margin means you put down RM 7,500-10,000; HLB would require RM 15,000. For used-car buyers with limited cash reserves, that gap in margin matters more than the rate gap.

3. Aitab Hire Purchase-i — fully developed Islamic option

Public Bank's Aitab-i (offered via PB Islamic / PIBB) is a fully developed Al-Murabahah-based hire purchase with a published RinggitPlus rate listing at 3.31%-4.10% p.a. reducing-balance. Crucially, Aitab-i carries mandatory Ibra' (early-settlement rebate) under BNM Shariah-Advisory-Council guidelines — mathematically fairer than Rule of 78 for any pre-HPAA agreement. Hong Leong Islamic Bank processes auto financing under HLB Group rates without the same dedicated Islamic-HP marketing presence in 2026, which makes Public Bank the cleaner halal-compliance pick.

4. Relationship scoring depth

Public Bank's relationship-based credit assessment weighs more than just salary crediting. If you hold Public Mutual investment accounts, PB Gold or PB Visa Platinum cards for 2+ years, or a PB fixed deposit, those inputs feed into the credit score and routinely close the 0.15pp rate gap versus HLB. The thicker your existing PBB footprint, the more likely your quoted rate beats Hong Leong's standard tier — and the relationship signal also speeds up approval.

Worked Example: RM 70,000 / 7-Year New-Car Loan

Buying a Perodua Ativa or Honda City equivalent at RM 80,000 on-the-road, financing 87.5% (RM 70,000), 7-year tenure. Pre-HPAA flat-rate basis.

The headline saving with Hong Leong is real but modest — under a 1% gap in total cost. That is small enough to be overridden by Public Bank's relationship scoring (existing PB Mutual or PB Visa Platinum customer), dealer pipeline (Proton/Perodua/Toyota dealer says PBB is faster), or halal-compliance requirement (Aitab-i Islamic). For everyone else with no special tie-breaker, take HLB.

Early Settlement: Where the Real Money Hides

For pre-HPAA conventional loans signed before 31 May 2026, both banks apply the Rule of 78 method to calculate the rebate of unearned interest if you settle early. Rule of 78 front-loads interest charges — the first year of a 7-year loan absorbs roughly 25% of total interest, the first three years roughly 65%. Settling in year 3 of a 7-year loan returns only a small rebate.

This is where the Islamic vs conventional distinction becomes a real money decision. Public Bank Aitab Hire Purchase-i applies the Ibra' (rebate) method, which returns the unearned profit calculated on the remaining tenure — closer to a reducing-balance position. On an RM 70,000 / 7-year loan settled in year 4, Aitab-i typically returns RM 2,000-3,000 more in rebate than a Rule-of-78 conventional loan at the same notional rate.

Hong Leong's offsetting advantage: the explicit no-penalty stance. Conventional Public Bank HP leaves room for an administrative settlement fee at the bank's discretion; HLB's PDS removes that discretion. For pre-HPAA borrowers planning to settle in years 3-5 (refinancing, selling the car, lump-sum bonus), the two products represent different risk profiles:

• Halal-conscious or early-settlement-likely: Public Bank Aitab Hire Purchase-i — Ibra' rebate is the strongest pre-HPAA early-settlement protection available in Malaysia.
• Non-Islamic and early-settlement-likely: Hong Leong Auto Loan — explicit no-penalty plus the lower headline rate.
• Signing on or after 1 June 2026: The Hire-Purchase Amendment Act moves all new conventional agreements to reducing-balance, so the Rule-of-78 disadvantage disappears for both banks' conventional products. Compare on reducing-balance EIR only.

Verdict by Profile

Cross-check the wider panel before signing — Maybank, CIMB, AmBank, and RHB all have profile-specific strengths that may beat both of these two. Our best car loan Malaysia 2026 roundup covers the full lineup, and if you have already narrowed to Maybank vs Public Bank, see that head-to-head for the parallel comparison. For Hong Leong vs Public Bank on the home-loan side — same banks, different decision — see our home-loan comparison.

Our Verdict

Pick Hong Leong Auto Loan if you are a rate-first new-car buyer with no special tie to Public Bank — the 0.15 percentage-point flat-rate gap, the explicit no-early-settlement-penalty, the age-70 cap, and the cheaper recond rate together make HLB the default choice for the average Malaysian car buyer in 2026.

Pick Public Bank Hire Purchase if you already bank with Public Bank deeply (PB Mutual, PB Visa Platinum, FD), if your dealer recommends them for faster processing, if you are buying an older used car needing 80-85% margin, or if you want a fully halal Aitab Hire Purchase-i product.

For agreements signed on or after 1 June 2026, the HPAA reducing-balance method resets the comparison — Public Bank's Aitab-i at the 3.31% floor currently undercuts what HLB conventional is expected to publish. Wait two weeks if you can, and compare on reducing-balance EIR only.

Frequently Asked Questions

Last updated: May 2026. Pre-HPAA flat-rate data verified from existing SmarterPik PBB and HLB single-bank reviews, RinggitPlus aggregator, and HLB Auto Loan Product Disclosure Sheet v5.1 (April 2026). Post-HPAA reducing-balance rates are early-stage — verify the live PDS before signing on or after 1 June 2026.