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There are numerous banks that offer both new and used car loans in Malaysia. You can use the table below to compare the various car loans avaliable in Malaysia to find the best one for you. It will also help you understand the interest rates and eligibility criteria that will be applicable on the new or used car loan that you opt for.
Affin Bank
Hong Leong
Kuwait Finance House
As per the institution’s discretion
Public Bank
RHB
Car Loan also known as Hire Purchase, is a type of financing plan available to individuals as well as institutions to help finance the purchase of a vehicle/car.
On the basis of financing principles, there are two types of car loans available:
On the basis of the type of the car, the car loan can be classified into the following types:
The following is the list of features and benefits associated with car loans:
Let’s take a look at the list of banks and financial institutions that offer car loans in Malaysia:
Check out Car Insurance In Malaysia
The eligibility depends upon a list of factors like customer’s legal capacity, credit character, payment behaviour in the past, and the bank’s specific requirement. The following are the basic car loan application process requirements:
The car loan process may require a different set of documents depending upon the type of applicant and the car loan package. Let’s take a look at the different type of documentation required for different type of customers:
| Interest Rate/Profit Rate | ||||
|---|---|---|---|---|
| Affin Bank | Conventional Hire Purchase | Pegged to base rate at 3.85% p.a. flat | Pegged to base rate at 3.85% p.a. flat | |
| Affin Islamic | Hire Purchase-i | Pegged to base financing rate at 6.71% p.a. | Pegged to base financing rate at 6.71% p.a. | |
| AmBank | AmAUTOMate | 4.50% p.a. | 4.50% p.a. | |
| AmBank Islamic | Arif Hire Purchase-i | Pegged to bank’s base financing rate. | Pegged to bank’s base financing rate. | |
| Bank Muamalat | Hire Purchase-i | Depends upon the current Bank’s prevailing rates. | Depends upon the current Bank’s prevailing rates. | |
| CIMB | Hire Purchase | 2.75% to 4.70% p.a. | 4.00% to 7.95% p.a. | |
| CIMB | Hire Purchase-i | 2.75% to 4.70% p.a. | 4.00% to 7.95% p.a. | |
| Hong Leong | Auto Loan | Fixed rate: Up to 10% p.a. | Fixed rate: Up to 10% p.a. | |
| Floating rate: Up to 17% p.a. | Floating rate: Up to 17% p.a. | |||
| Hong Leong Islamic | Auto Financing-i | 3.78% flat | 3.78% flat | |
| Maybank | Al-Ijarah Thumma Al-Bai | 3.40% to 4.10% p.a. flat | 4.25% to 4.50% p.a. flat | |
| Maybank | Hire Purchase | 3.40% to 4.10% p.a. flat | 4.25% to 4.50% p.a. flat | |
| Maybank | My First Car Loan | As per bank’s discretion. | As per bank’s discretion. | |
| Public Bank | Aitab Hire Purchase-i | Pegged to base financing rate at 6.72% p.a. | Pegged to base financing rate at 6.72% p.a. | |
| Al Rajhi | Superbike Financing-i | As per bank’s discretion. | As per bank’s discretion. | |
| Al-Rajhi | Automobile Financing-i | As per bank’s discretion. | As per bank’s discretion. | |
| Bank Islam GradHitz | Vehicle Financing-i | 2.90% to 3.60% p.a. | NA | |
| Bank Islam | Vehicle Financing-i | 2.90% to 3.60% p.a. | NA | |
| Bank Muamalat | Muamalat Vehicle Financing-i GradPack | Depends upon the current Bank’s prevailing rates. | NA | |
| Bank Rakyat | Auto Hire Purchase Financing-i | 2.80% to 3.50% p.a. | NA | |
| Bank Rakyat | Vehicle Financing-i | Up to 15.00% p.a. | NA | |
| BSN | Hire Purchase | 2.53% to 3.15% p.a. | NA | |
| BSN | Hire Purchase-i | 2.53% to 3.15% p.a. | NA | |
| Hong Leong Mach | Cruise Control Car Loan | As per bank’s discretion. | NA | |
| KFH | Automobile Ijarah-i | As per institution’s discretion. | NA | |
| RHB | Hire Purchase | As per bank’s discretion. | NA | |
| RHB | Vehicle Financing-i | Up to 12.00% p.a. | NA | |
The monthly repayment instalment of a car loan calculation depends upon the total approved financing amount, the profit or interest rate associated with the plan, and the length of the financing tenure.
For a fixed rate car loan, the monthly instalment can be calculated using the following formula:
M = [A + (A x R x T)] / t
Where M = Monthly instalment; A = Total financing amount approved; R = Profit rate or interest rate; T = Financing tenure in years; t = Financing tenure in months.
Before a customer opts to get a car loan, he/she needs to keep some factors in mind. The following is a guide to choose the right car loan:
Q. What are the factors that affect the financing amount associated with a car loan?
A. The approved amount of a car loan depends upon the following factors:
Q. What is the difference between fixed and floating rates of interest associated with a car loan?
A. With a fixed interest car loan, the monthly repayment instalments will be fixed and known from the beginning of the loan period. But the floating rates of interest depend upon the base rate of the bank and market conditions. Thus floating rate of interest may change during the loan period, that might imply a change in the amount of monthly repayment instalment amount.
Q. What are the factors that affect the interest rate or profit rate associated with a car loan package?
A. This mainly includes credit history and a credit score of the applicant, monthly income and debt-to-income ratio of the applicant, the car’s type, model and age, down payment paid for the car, and tenure of the loan. The interest/profit rates can also vary with a change in market conditions and the base rate or base financing rate of a bank.
Q. Is it mandatory for one to have a savings or current account with the bank offering the car loan?
A. No. It is not compulsory for the customers applying for a bank’s loan package to have a savings or current account with the bank.
Q. How much time does a car loan process take for approval?
A. Once an applicant fills out the car loan application form and submits it to the bank along with the set of required documents, the bank will check the validity of the documents. After successful validation, the bank will contact the customer with the details regarding the loan.
Check out How to Get a Car Loan Faster in Malaysia
Q. What are the ways in which I can make repayments on my car loan?
A. The repayments for a car loan can be made via interbank GIRO, by placing standing instructions, or by making an over-the-counter payment at the nearest branch of the bank or financial institution that has offered the car loan.
Q. What are the kind of charges I have to bear with a car loan?
A. Depending upon the car loan package, you can be charged with the registration fee, processing fee, stamp duties, insurance or takaful coverage charges among others.
Q. When do I get the ownership of the vehicle with a car loan?
A. With a hire purchase facility, the ownership of the vehicle will be transferred to you once you complete the repayment of the loan.
Q. Does a car loan application process require one to be accompanied with a guarantor?
A. The requirement of the guarantor may vary from application to application. The customers not meeting the bank’s terms and conditions may be asked to bring a guarantor to the application process. Specific bank car loan packages that are open to foreigners may also require a local guarantor during the application process.
Q. Should I take the motor insurance coverage or takaful coverage with my car loan?
A. For most of the banks, it’s mandatory for you to get the motor takaful/insurance coverage on your car loan as per the Hire Purchase Act 1967.
Q. What if I miss to pay a monthly repayment instalment on my car loan?
A. In case you miss timely payment on an instalment, you will be charged with late payment charges. Depending upon whether the car loan package is under conventional financing principle or Islamic principle, the charges may differ. The following are the late payment charges associated with car financing packages under both the principles:
Conventional car financing: Up to 8% of the overdue instalment amount.
Islamic car financing:
Where IIMM = Islamic Interbank Money Market.
Q. Am I allowed to partially pay the monthly instalment with my car loan?
A. No. The banks or the institutions offering a car loan don’t allow their customers to pay the monthly instalment partially. You are advised to pay the agreed upon amount on or before the due date every month.
Q. What happens if, during the loan facility, I decide to pay the entire outstanding principal at once? Will the bank allow me to do the same?
A. Most of the banks allow their customers to make an early settlement on the car loan.
Q. Is there a benefit associated with an early settlement on my car loan?
A. Most of the banks offer a rebate to the customers with an early settlement of their financing facility. The rebate is calculated on the unutilised portion of the total tenure.
Q. How is the monthly repayment instalment calculated with a car loan package?
A. The monthly repayment instalment for a loan package is based on a flat interest/profit rate is calculated using the following formula:
M = [P + (P x R x T)] / t
Where M = Monthly instalment amount; P = Total approved financing/loan amount; R = Interest rate or profit rate; T = Financing/Loan tenure in years; t = Financing/loan tenure in months.
Perusahaan Otomobil Nasional Sdn Berhad (Proton) proclaims that existing dealers and new investors have submitted about 170 applications within three months requesting for a 3S/4S upgrade. About 66 of these applications have been processed and approved.
Proton specifies that Zhejiang Geely Holdings Group, a Chinese firm, has acquired 49.9% of its shares and the initiative to upgrade the dealer network was part of the acquisition. There may be more such initiatives coming up this year in order to build cars that are no less in quality than premium cars.
In April, the buyers of Proton Iriz and Proton Exora will be offered 0% financing for the first year when they sign-up with Hong Leong Bank for a 5-year loan. With the purchase of Proton Saga or Persona in April, the buyer gets a free body kit. With other models, Proton is providing rebates and incentives to drive sales.
16 April 2018
Workshop service liberalisation is a new policy that is being proposed by Datuk Armin Baniaz Pahamin, CEO, CarBengkel, to be a part of National Automotive Policy (NAP). With the proposed policy, the warranty for a new car can be claimed at over 50,000 workshops instead of the 500 workshops recommended by car manufacturers.
Describing the perks of the policy, Armin expressed that maintaining the car at any workshop of the car owner’s choice in any convenient location will reduce the cost of maintenance. The liberalisation would be profitable for over 590,000 car owners per year. He also says that the OEM service centres are usually overcrowded with customers and are being a monopoly. This situation can be balanced by diverting the customers towards independent workshops.
The legal enforcement of Automotive Maintenance and Repair Service Bill, which deals with raising the professionalism among mechanics has been delayed due to the upcoming 14th General Election. Liberalisation will give way to providing the license to well-trained mechanics who provide quality service to car owners.
As of last year, it was found that Malaysia has 53,000 workshops and only 30,000 of them are registered with the Domestic Trade, Cooperatives and Consumerism Ministry. Also, only 500 workshops are direct affiliates of original equipment manufacturers.
Armin Baniaz asks the government to consider supplying original parts to all workshops so that they can benefit with the sales of these parts if not from the consumers.
16 April 2018
In the first quarter of 2018, the German automobile brand, Mercedes-Benz Malaysia Sdn Bhd (MBM) has sold 3,335 cars in the country. These figures have aided the company to achieve a growth of 13.2% in the beginning of the year as compared to the last year’s numbers. In the first quarter of 2017, the auto brand had managed the sale of 2,895 units.
This is registered as a good development considering the poor performance of domestic automobile market in the country.
According to Dr Claus Weidner, President and Chief Executive Officer of the company, January and February saw the most number of car unit deals to contribute to the overall growth. He further informed that limousine models like Mercedes-Benz E, C, and S-Class vehicles have sold 1965 units in total; whereas GLA and CLA Class along with A-Class and B-Class models of the brand have recorded a sale of 596 units in this quarter. Sales for both these segments are also better than the last year’s respective figures.
In a more recent development, Mercedes-Benz Malaysia has also introduced a new electric mobility brand called ‘EQ’ aka ‘Electric Intelligence’, which they hope will be the forerunner for all future electric vehicles.
13 April 2018
Mercedes has added a new member to the electric-powered car market in Malaysia called EQ. EQ stands for Electric Intelligence and was launched at the Paris Motor Show 2016. In addition, Mercedes also redesigned Mercedes C350 e and E350 e and added them to the EQ family. The company plans to release more electric cars in the near future.
MBM (Mercedes-Benz Malaysia) also revealed their outlook on EQ Agility Care package which offers scheduled vehicle maintenance and servicing with EQ power charging wall box when a customer buys the EQ Power C350e or E350e for a tenure of ownership ranging between 3 to 5 years.
As far as charging stations are concerned, all the charging stations at Bangsar Shopping Centre, Sunway Pyramid Mall, Pavilion Kuala Lumpur and others will be rebranded to EQ facilities. Also, the customers will be rewarded with complimentary usage for a year.
MBM disclosed that the company has sold around 3,335 vehicles in the first quarter of the year. These numbers contribute an increase in the performance of the company by nearly 13.2% as compared to the previous year. In particular, 1,965 luxury cars of C, E and S-class, 596 units of compact cars and 90 dream cars in the first quarter.
13 April 2018
As an effective solution to boost car sales, Proton Edar Dealers Association Malaysia (PEDA) has recommended the government to scrap old cars. PEDA has submitted a report to the government requesting to put the Vehicle End of Life policy in force. The policy was initially proposed in the year 2009 and was scheduled to be effective from 2014. However, the negative response from the public made the policy remain on papers.
According to the policy, vehicles that are 15 years of age or above must go through an inspection every year as a mandatory step for road tax renewal. If the vehicle does not clear the inspection, it must be repaired or scrapped, similar to the Singaporean policy.
The proposal made by PEDA says that the those who own vehicles that are 10 years of age or more would get a rebate of up to RM5,000 if they exchange their vehicle for a brand new vehicle from a local OEM. Adding to this proposal, Datuk Armin Baniaz Pahamin, Advisor, Peda claims that there over 28 million registered cars in Malaysia among which many are not in a safe driveable state.
13 April 2018
The Proton Edar Dealers Association Malaysia (PEDA) has recently made an appeal to the Malaysian government to reinstate its ELV (End of Life Vehicle) policy.
The association wants the ELV policy, which was initially introduced back in 2014 and was withdrawn later, to be reinstated in the country to enhance the sale of new vehicles. Datuk Armin Baniaz Pahamin who is a PEDA adviser, recently stated that Malaysia presently has around 28 million registered cars, but maximum of the cars may not be qualified to drive on the roads. With no age-limit imposed on the cars of the country, unlike other developed countries; now citizens are reluctant to buy new cars and this is slowing down new car sales.
According to a report, the total industry volume (TIV) has witnessed a descending trend since 2015, and the sale of new cars is constantly falling. For example, in comparison to the numbers of year 2016, which registered the sale 580,123 units, in last year, only 576,635 units of vehicles were sold.
Consequently, the association has urged the government to address this issue in the next National Automotive Policy (NAP) review.
12 April 2018
Ongoing Perodua takeover deal between UMW Holdings and MBM Resources (MBMR) has witnessed a twist as Daihatsu is not in favour of UMW taking an overpowering stake in Perodua.
According to latest reports, Datuk Abdul Rahim Abdul Halim, chairman of MBM, has recently mentioned about a letter from the Japanese shareholders (Daihatsu) that gives their opinion on the Perodua deal. He further mentioned that according to the letter, the Japanese investors are against the proposal of any one company holding a maximum amount of stake in Perodua.
Until now, UMW Holdings was all geared up to take control of Perodua with a plan to increase its stake from the present 38% to 70.58%. In this attempt, UMW had also offered proposals to PNB Equity Resources (PER) and MBMR, which also are shareholders in Perodua, to take over their stakes in the company. MBMR, however, had rejected the offer.
Now, if reports are to be believed, UMW has offered to extend the offer till the end of April.
12 April 2018
Jaguar Land Rover Malaysia (JLR MY) is launching their latest Range Rover Velar model this month in Malaysia. The SUV is packed with exclusive contemporary features that give a pleasurable driving experience.
The vehicle will be offered as a P250 model and the AWD system will be backed with Intelligent Driveline Dynamics (IDD) that provides better traction on- and off-the-road. Among other features, the car’s exterior gear list includes retractable door handles, 21-inch wheels that offer a choice of 4 different designs, and full-LED headlamps among others. Furthermore, the InControl Touch Pro Duo Navigation system of the SUV allows you to operate its multiple features, concurrently. A Surround Camera System, Interactive Driver Display digital instrument board (12.3-inch), hands-free powered rear gate, and Auto High Beam Assist are among some other special specifications of the vehicle.
For safety purpose, the model is equipped with 6 airbags and a cruise control speed limiting function which can come in handy for a driver.
11 April 2018
The car prices have been reduced by 16.38% on an average from 2013 to February 2018. This development is in-line with the targeted reduction of 30% in car prices as assured by the Malaysian government five years ago.
Datuk Seri Ahmad Maslan, Deputy Minister, International Trade and Industry said that the car prices had dropped by 0.52% last year. He also said that even if the prices rose by 2.13% in 2016, the overall drop in car prices reached 12.55%. The reason for this fluctuation is said to be the depreciation in the ringgit value.
Ahmad also listed the model-wise reduction in car prices, such as Proton Exora 1.6—4.7%, Perodua Myvi 1.3—19.4%, Perodua Alza 1.5—11.3%, Honda Jazz—19.3% and Mazda CX-5—6.6%.
He said that since car prices are not determined by the government but by the manufacturers, the government faced a lot of challenges in the process of price reduction. Some of these challenges being market uncertainty, price of completely knocked-down parts, transportation cost, car loan affordability, car insurance premium rates and others.
The government has been discussing with the car manufacturers regarding the various possible ways to reduce the car prices that include but not limited to introducing new models at affordable costs, giving up on importing and beginning new installation plants in Malaysia, etc.
2 April 2018
Al-Rajhi Bank
AmBank
Bank Islam
Bank Muamalat
Bank Rakyat
BSN
CIMB
Maybank
