The concept of car loans is simple enough - the bank finances the purchase of your dream car, and you repay this borrowed money in terms of Monthly Installments . The quantum of available funds is such that,
- you don’t have to indulge in a long duration of careful planning and saving to collect up enough money to purchase the car yourself.
- not be limited by a choice of only affordable automobile models.
- spend a truckload on installment if initially the money is borrowed from other third party sources. A modern day car loan allows you the privilege to own a car without running into a massive financial problem or adjustment.
Car Loan Malaysia
Malaysia is on the cusp of an economic boom. This Asian country clocked a GDP of $746.821 billion in 2014 that positions it as the third largest economy in ASEAN and the 28th largest in the world. The country is on the radar of almost all the big-time international automobile manufacturers and is actively seen as a potent market for the unbound growth of the automotive sector. The country’s home grown brands like Proton and Bufori are also major draws, which are making a splash on the global scene. Just like anybody else on planet earth, owning a car is a big deal with any Malaysian. This signals an individual’s economic standing and buying power, a modern day rite-of-passage maybe. Helping Malaysians across the economic strata purchase their dream set of wheels are the customer centric car loan packages from the various banking institutions. These loans are designed to be extremely customer friendly, quite a few as disbursed by Islamic banks that follow the Shariah principles and thus are in line with the popular sentiments as well as extremely convenient in terms of the repayment schedules.
Compare Car Loan Interest Rates in Malaysia
|Bank||Bank Car Loan||Interest Rate||Tenure||Min age limit/||Max Age Limit||Income Limit||Guarantor Requirement|
|Ambank Car Loan||3.28%||9Years||18 Years and above||55 Years||RM24000||Required|
|Maybank Car Loan||3.22%||9Years||18 Years and above||70 Years||RM24000||Required|
|Public Bank Car Loan||3.3%||9Years||18 Years and above||65 Years||RM1800||Required|
|CIMB Car Loan||3.35%||9Years||18 Years and above||70 Years||RM 12500||Required|
|RHB Car Loan||3.01%||9Years||18 Years and above||65 Years||RM24000||Not Required|
|Affin Bank Car Loan||3.18%||9Years||18 Years and above||70 Years||RM24000||Required|
|Hong Leong Car Loan||3.3%||9Years||21 Years and above||65 Years||RM24000||Required|
|Bank Islam Car Loan||2.7%-2.77%||9Years||18 Years and above||60 Years||RM24000||Required|
|Bank Rakyat Car Loan||2.70% - 2.95%||9Years||18 Years and above||70 Years||RM24000||Required|
|MBSB Car Loan||3.2%||9Years||18 Years and above||70 Years||RM24000||Required|
Car Loans: How they work in Malaysia
Buying a car is more than just a means of transport. For some it signifies a certain level of accomplishment regardless of whether it is the first car they own or not. On one end of the spectrum, for those who are first time buyers, it is a sense of joy and pride that they can afford and require a car and for others it may be the fact that they have accomplished more in life and want that reflected in a newer upgraded car like a luxury sedan. On the other end of the spectrum it involves the basic necessity of providing a safe mode of transportation from point A to point B. The want or need of a car has varying reasons behind it but one thing is for sure that even if it is a pre-owned car, a certain amount of additional financing is required.
This is where car loans step in. Many of you have heard this term before and some may even have taken one out before or knows someone who has. But with all the terminologies and jargon flying around, this article helps clear the air on what car loans really are and how they work.
What they are: The car loan is a type of loan which is given out to be used for a specific purpose of purchasing a car, new or pre-owned. These loans are also commonly known as hire purchase loans. The name comes about so because when the borrower buys the car using a loan, he is not the owner but the hirer. The lender is the owner and when the lender has been repaid with interest, the borrower or hirer becomes the owner. This is why cars are repossessed by owners/lenders when there is a failure to repay.
How they work: Most car loans in Malaysia do not provide 100% margin of financing which is to say that they won’t cover the entire cost of the car but do cover up to 90% of the financing margin. The remaining 10% should be put as down payment for the car by the hirer/borrower. 100% financing margin does exist but cater only to a certain demographic, mostly first time buyers and is offered by very few lenders. The more the down payment put down by the borrower, the lesser the loan amount required and inevitably, the lesser interest is paid. Interest rates charged is usually fixed rate or variable rate.
In fixed rate, the interest amount remains fixed throughout the tenure. The borrower has to pay the same instalment throughout the duration and offers the advantage of allowing borrowers to manage and plan their finances well into the future. The variable rate offers instalments that fluctuate with the base lending rate of the bank. The uncertainty of such instalments can be offset by opting for flexible type of variable rate loans where borrowers have the advantage of being able to pay additional amounts whenever possible and reduce the interest amount over time. The tenures offered by most car loans, fixed or variable rate, are usually a maximum of 9 years. The longer the duration of the loan, the lesser the instalment amount would be but at the end of the tenure, the borrower would have ended up paying more in interest.
Car loan Calculator to help you know your Monthly Installments
Having a car of your own helps you lead a comfortable life and reduces your daily commuting worries. Instead of utilizing your hard earned money to purchase a car, you can opt for a car loan and drive home your chosen car. A car loan is a short term finance offered by banks to help you purchase a new or used car. The amount borrowed is known as loan principal and the additional charges you pay on your car loan is called the interest component. Interest component is something that helps lenders earn profit on the amount lent.
There are many banks in Malaysia that offer attractive car loan schemes and competitive interest rates to help you purchase a car of your choice. Now, you can easily drive home your dream car in Malaysia by opting for a car loan at affordable interest rates. But, don’t forget to compare various car loan schemes available in Malaysia and calculate your monthly installments and interest applicable on your loan before you finalize your deal for a new or second hand car.
Why you need to compare and calculate car loan interest/installments
Comparison between various car loan schemes provided by different lenders help you choose the best as per your budget. Similarly, calculation of your monthly installments will help have estimate how much you can afford to pay per month as repayment towards your car loan. Then based on your loan repayment capacity, you can choose a car. It’s advisable you borrow an amount which you can repay on time without taking less financial trouble.
Car loan calculator – what is it?
A car loan calculator is an electronic means of calculating the monthly installments for your car loan. You need to fill certain important details in the calculator to get the exact amount of your monthly installments for your car loan. Monthly installments remain fixed for the entire tenure if you opt for a fixed rate car loan which you need to repay your bank on a scheduled date every month in return of the amount that you receive from the bank. You can pay off both – the principal as well as interest component of your car loan in monthly installments.
How it operates
Car loan interest rates and monthly installments vary based on various factors. These factors include - the type, model, loan repayment tenure, age of your car, your financial position and down payment you can afford to make. Usually, you need to enter the following information in a car loan calculator to know your monthly installments and interest rates:
- Car price Enter in Malaysian Ringgit.
- Down payment in Malaysian Ringgit.
- Loan Period.
- Interest rate.
Benefits of using Car Loan Calculator
- It helps you know the exact amount of your monthly installment liabilities for your car loan.
- Also, it will let you know the actual cost of the vehicle after paying the interest on your loan.
- Provides you with a principal, interest and balance repayment chart.
- Also provides a loan amortization table that includes the break up between the interest part and principal part of your car loan monthly installment.
So, use a car loan calculator to know your monthly installments and total interest payment made towards your car loan. Knowing your monthly repayments in advance reduces your financial confusions, helps you set your other financial goals, and plan your monthly budget efficiently.
Car Loan Interest Rates
A car loan interest rate starts anywhere from 2.5% to 4.10% and the finance that you can get for your car from a loan in Malaysia is up to 90%. Note that the downpayment starts from 10% of the loaned amount as mentioned before.
Car Loan Down Payment
When you take up a car loan in Malaysia the general trend whether a citizen or an Expat, car loan down payments start from 10% of the car loan amount. The individual would need to provide the bank with certain documents such as passport, proof of income, bank statements, work permit and a company letter especially if the individual applying for the loan is an expat.A general rule with most car loan available in this country requires an income or salary of at least 3 to 5 times the monthly payment required to pay off the loan amount.
Car Loan Eligibility
Listed below are some of the common criteria that qualifies you for a car loan,
- Must be a Malaysian citizen, aged 18 years or above. Certain banks have provisions for non-citizens as well.
- A set annual salary that is deemed adequate by the loaning bank. Individual banks usually have their own custom requirements in terms of the annual income.
- Proof of steady employment in an organization that is listed under the Bank’s approved list.
- Self-employed individuals must satisfy specific conditions of their own to qualify for the loan.
Proof of identity and address (residence address must be in use for a specified duration to be admissible).
Car Loans Features and Benefits
In Malaysia, purchasing a car is quite expensive, as compared to the other countries in the region. But one needs vehicles and hence an apt motor insurance with beneficial features are absolutely necessary. It is important to note the prevalent features available for car loans in Malaysia:
- In most cases, you can buy a car that is reasonably affordable for you and yet not lower than your expectations or wants.
- When you take a car loan in Malaysia, it saves you the time for arranging for the money, which in most cases takes years to procure.
- It also helps to check your monthly expenditure and does not drive a whole in your pocket when you are purchasing the car.
- The interest rates for car loan repayment start from 2.5% which is reasonably low does not add up to a large amount on the long run.
- Generally, in Malaysia, car loan can repayment tenure can last up to 9 years making it very comfortable for the repayment process.
- The minimum age limit for procuring a car loan in this country is 18 years for most banks.
- The maximum age of eligibility for applying for a car loan in Malaysia goes up to 70 years, based on the bank.
- You can use an online car loan calculator when purchasing a loan online. Most banks offer loan application online making the process simple.
- There are some banks which offer car loan provisions for non-citizens of Malaysia as well.
- The local brands in Malaysia for cars have as compared to the foreign brands. But that should not stop one from buying their dream car.
All the banks offer competitive interest rates and are offered by leading banks in the county which include names such as CIMB, Ambank, Maybank and RHB.
Important Points to Keep in Mind While Applying for a Car Loan
Buying a car is one of the most important decisions of a person's life. While car prices are on the higher side to be paid in one lump-sum amount, car loans have made it extremely easy to possess a car of your choice. Banks and other financial institutions offer various types of car loans to suit the individual needs of customers. In Malaysia, since Muslims form a majority of the local population, Islamic banking variants of car loans are also quite popular.
While driving the new car to your place might seem to be the only thought when you are availing a car loan, there are certain other points too that need to be watched out for.
- The first and the most important point to keep in mind is whether you want to buy a used car or a brand new car. Since, loan rates and loan amounts differ for new and used cars, understanding and zeroing down on your requirement is a good first step towards car loan acquisition.
- Compare the different types of car loans available in the market. While you might be tempted to jump at the first offer that comes your way, it is always advisable to research thoroughly and then decide on the best fit available.
- Take stock of your current financial situation. Also keep in mind your future scenario wherein you will be required to make monthly car loan installment payments. Most people falter in calculation of anticipated financial liabilities and hence suffer losses due to delayed loan repayment or non-payment of car loan.
- Ask and be informed about each and every point of the terms and conditions attached to your car loan. Sometimes, a hurried decision leads to tiny ignored terms that may affect you severely once the loan has been availed.
- Malaysia has lots of car loan aggregators that have special tie-ups with various automobile companies. Going via these can help you crack better car loan deals at better cost. The flip side, however, is that that these portals might promote just one or two brands out of all the available car loan options.
Top Banks Providing Car Loans in Malaysia
The assessment of the tops banks providing car loans in Malaysia are based on their trust and reliability value among their customers. They are also based and researched on their reliability criteria which including maximum age limits and minimum age required for application of the car loan. The other factors taken in consideration that is often a deciding factor for any customers are the interest rates charged on the loans. All the banks mentioned here offer a repayment tenure of up to 9 years. Note that the banks are not ranked here and left to the reader’s requirements from loans. Each of these banks variations of car loans and are available under the 3 types of loans available in the Malaysian market.
Ambank Car Loan
Ambank car loans come with a lucrative car loan interest rate of 3.28% base which is reasonably affordable for Malaysians. Moreover it is one of the most trusted banks in Malaysia along with being one of the largest banks of its kind. There are highly comprehensive car loan plans from AmBank. The company boasts of over 45 years of experience since its establishment in the country as the Arab-Malaysian Development Bank.
Maybank Car Loan
Maybank is arguably one of the leaders in finance when it comes to personal finance products. This is applicable for their car loan too. The interest rate is only 3.22% but the eye-catching feature of the car loans offered by Maybank is that, the maximum age eligibility for a car loan is a whopping 70 years, giving it more scope for customers who are retired or elderly.
Public Bank Car Loan
Public Bank car loan in Malaysia has some distinctive eligibility features which make it stand out. Firstly the maximum limit of age for application of the car loan is up to 65 years. Secondly the minimum monthly income required for application is only RM 1800. It also has a comfortable interest rate of 3.3%.
CIMB Car Loan
CIMB is a well-known financial institution in Malaysia and has a large array of personal finance products where the car loan stands out with its beneficial features. It has a minimum income requirement starting from RM 12,500 only and the interest rate starts from 3.35%. The maximum age limit for loan application is 70 years, which is quite reasonable.
RHB Car Loan
The biggest distinguishing factor, besides the reliability of the RHB brand is the fact that, it is one of the few banks where a guarantor is not required for loan application. It also has a car loan interest rate of 3.01% and the maximum age limit for eligibility for the loans is 65 years.
Affin Bank Car Loan
Affin Bank car loans have reasonably lower rate of interest starting from 3.18%. It also has some great features including one of the fastest approval processes of car loan and up to 90% funding for the car purchase from the showroom. The products are often very comprehensive. For eg, there is an easy repayment model for renewal of vehicle insurance and road tax.
Hong Leong Car Loan:
The Hong Leong Bank offers comprehensive car loan plans that comes along with the reliability and trust developed by Hong Leong Bank. The interest rates are reasonably set, starting from 3.3% and the maximum age of eligibility for applying is up to 65 years, which is reasonably high.
Bank Islam Car Loan:
One of the lowest car loan interest rates are offered by Bank Islam, which is between 2.7%-2.77%. Besides that this Islamic banking institution is also well known and trusted throughout Malaysia.
Car Loan Guarantor
The car guarantor if required by the bank helps in loan repayment if the individual with the car loan is unable to make the loan repayments. The guarantor needs to also provide documents such as ID proof and proof of income.
Car Loan Application
The car loan process for application is as simple as it sounds. Here is what needs to be done to procure a loan for your vehicle:
- Choose a car, whether used/ brand new and check with an online EMI calculator whether you can afford the loan payment or not.
- Arrange a meeting with the car owner and make sure you have all the documents ready
- Once you submit your documents to the bank, the processing would take 2-3 days.
- Bank would interview for the car loan in 1 or 2 working days time.
- Car loan approval generally takes 1 to 2 workings days from the bank manager.
Documentation required for car loan includes:
- Application (Copy)
- Identity Card/ Proof of ID/ Passport
- Driving License for Malaysia
- 3 copies of Latest Pay slips or proof of income if you are self-employed
Supporting Document (if Any):
These documents if available, help to reduce interest rates, although it depends on the bank’s policy on loans as well:
- Bank Statement (3 Month Latest)
- EPF Statement
- Offer Letter
- EA Form
Car Loan Quote
Car loan quotes depend on various factors which include:
- Income of applicant
- Documentation provided
- Credit Rating of the individual
- Interest Rates charged by the bank
- Tenure required for loan repayment
It is best to compare car loan quotes in Malaysia online and research which is the best vehicle loan suitable for you, then go forward accordingly.
Difference between Hire Purchase and Car Loans
There is no water tight difference between hire purchase and car loans. Both are two different ways of financing your car and both can help you purchase your dream car. A hire purchase agreement is also known as car loan. However, a hire purchase agreement and a car loan operate differently. When you opt for a hire purchase, you become the “hirer”, and the lender from whom you take the loan to purchase your car becomes the “owner”. The hire purchase agreement works in the following method – you select a car and pay the car dealer the required amount of money. In that case, your bank will hire the car for you and pay the remaining amount to the dealer. Going forwards, you need to return the whole amount to bank on monthly basis by repaying in installments. And, your car dealer will deliver the car to bank who is the actual owner. In case of a hire purchase, the car become a security or collateral.
But, when you take a car loan to purchase a car, you become the owner of the car as soon as you purchase it. However, you need to repay the principal amount along with the interest component on time so as to avoid penalty. And if you fail to repay your car loan on time, bank may repossess your car.
There are many banks in Malaysia offer Hire Purchase Car finance for purchasing both new and used, local and foreign cars. These hire purchase transactions are managed in Malaysia as per the Hire Purchase Act 1967.
Hire Purchase Decreasing Term Assurance
When you are making a large investment such as hire purchasing a car, you want your investment to be protected against all odds. It is your responsibility to make sure that in your absence or when you are enable to earn, in case of an unprecedented event, you can still make sure that your nominees or loved ones can use the car. The car’s ownership lies with the bank until the settlement is completed during the hiring period. But what happens in one’s absence to the car loan, does the money investment go to waste?
The bank has the right to take away the car or even take legal action against the defaulters. A Hire Purchase Decreasing Term Assurance protects you against such an occurrence. It pays the remaining installments for your hire purchase ensuring that neither do you owe anyone any money nor is your loved ones litigated. However, there are some exceptions which have been mentioned below.
Features and Benefits of Hire Purchase Decreasing Term Assurance
- You get protection for the hire purchase giving you the mental relief that your car purchase is covered.
- In the case of death or permanent total disability of the policyholder, the sum insured will be used to make the outstanding amount settlement for the loan
- The balance amount will be payable to the policy holder’s nominee(s).
- The applicant’s will hence remain untouched for the loan and the nominated can still use the car in the applicant’s absence or disability.
- It will also safeguard the applicant’s nominees from litigation issues which may be related to defaulting the payment of all the instalments.
- A single premium covers the hire purchase for protection throughout the hiring and repayment period.
What the Hire Purchase Decreasing Term Assurance Does Not Cover
- In the case of Suicide committed by the policyholder within six (6) months since the date of insurance effectiveness regardless the policy holder’s state of mind.
- In the case that Permanent Total Disability has been caused by attempted suicide
- regardless of the policy holder’s state of mind,
- felonious or not,
- self- inflicted bodily injury,
- disorderly conduct
- deliberate exposure to unnecessary danger
- Injuries that have occurred when:
- aviation (except as a fare-paying passenger on a commercial airline),
- military or aeronautical service,
- racing (other than foot-racing) of any kind;
- For existing conditions at the effective date of insurance under the Master Policy.
- And other standard exclusions.
Disclaimer: The above information provided is not exhaustive but to give the basic idea of how this loan works, in general and what to expect. Some companies may provide less or more benefits than mentioned here. Also they might have less or more coverage.
Fixed Rate Car Loans:
A fixed rate car loan is where the interest rate doesn't fluctuate during the whole tenure of your car loan. The borrower pays the same fixed rate of interest for the whole tenure. With a fixed rate car loan, a borrower can better plan his/her finance and predict future payments as the interest rate remains static. The right time to opt for a fixed rate interest loan is when you are sure or it is predicted that interest rate would go up in the future. So, when it goes up, you don’t have to take the burden of paying the extra amount as you have already chosen a fixed rate.
Variable Rate Car Loan:
A variable rate car loan is just the opposite of what a fixed rate car loan is. In variable or flexible rate car loans, interest rates fluctuate or change based on the economic condition and in relation to the prime lending rate of a bank. When the prime lending rate changes, the floating rate also changes. Floating rate of interest is also known as adjustable or variable rate of interest because it varies over the duration of your loan period. The main benefit of opting for a floating interest rate car loan is that when bank interest rates go down, you can pay reduced rate of interest and save a lot.
Common Car Loan Terms in Malaysia
A car loan agreement that allows a bank to be owner of your vehicle unless you make the full payment borrowed from it.
The extra amount charged on your principal amount by the lender for lending you the amount.
The period of time within which you need to repay your car loan. Usually, banks in Malaysia provide car loans for 9 years.
Fixed rate car loan:
The stable rate of interest you need to pay on your entire principal amount of car loan.
Flexible rate car loan:
The changing interest rates that you pay on the principal amount of your car loan amount.
Flexi car loan:
A car loan scheme designed particularly for graduates. Any students who have just completed his/ her university education and who are under the age of 30 can apply for a Graduate Car Loan.
Low interest loan:
A type of loan that charges less interest rates on the principal amount.
Annual Percentage Rate (APR):
The total yearly cost of a loan to the borrower which also includes the other charges and fees.
A car loan that comes with a host of flexibilities including excess repayment before scheduled date, flexible repayment tenure etc.
Useful Car Loan Articles
Car Loan FAQ's
Do banks in Malaysia offer car loan for used cars?
Yes, many banks in Malaysia offer car loans for used cars. For example Affin Bank Conventional Hire Purchase, Affin Islamic Hire Purchase-I, Maybank My First Car Loan and CIMB Hire Purchase-i, are some of the car loan schemes that provide finance for used cars along with new cars.
Do banks in Malaysia provide car loans for foreigners? What if I am a foreigner?
Yes, the banks in Malaysia provide car loans for foreigners or non-Malaysian citizens. Even if you are foreigner, you can easily get a car loan in Malaysia by submitting required documents.
What are most popular car loan schemes available in Malaysia?
Mentioned below are some of the popular car loan schemes in Malaysia:
- Affin Islamic Hire Purchase-i
- Affin Bank Conventional Hire Purchase
- Bank Islam GradHitz Vehicle Financing-i
- Al-Rajhi Automobile Financing-i
- AmBank AmAUTOMate
- AmBank Arif Hire Purchase-i
- RHB Hire Purchase
- Hong Leong Auto Loan
- Alliance Islamic Hire Purchase-i
- Public Bank Aitab Hire Purchase-i
- Public Bank Aitab Hire Purchase-i
- CIMB Hire Purchase-i
If I want to purchase a foreign car in Malaysia, will I get finance?
Yes. There are many banks that offer finance for purchasing foreign cars. Affin Bank, Bank Islam Maybank, CIMB and Bank Muamalat to name a few are some of the banks that offer car loans for purchasing foreign cars.
How much car finance can I receive in Malaysia for a new car?
You can normally get finance up to 90% of your car value as car loan. However, some banks may offer 100% financing on your new car.
What is a Graduate Car Loan in Malaysia?
It is one of the car finance schemes available in Malaysian for graduate students. Banks in Malaysia offer Graduate Car Loans for students who are under the age of 30 and have a degree or diploma from any of the colleges or universities.
What are the eligibility norms for a Graduate Car Loan?
The eligibility conditions for a Graduate Car Loan in Malaysia include - applicant’s age should be less than 30 years; he/she should have a diploma or degree and the car should be the first car purchased.
What are the different categories of car loans available in Malaysia?
Banks in Malaysia offer Used Car loans, Graduate Car loans, Flexi Car Loans and Low Interest Rate car loans.
What is a Flexi Car Loan?
It is a type of car loan that comes with a lot of flexibilities. Flexi Car Loans can be taken for financing both used and brand new cars in Malaysia. Hong Leong Mach Cruise Control Car Loan is a popular flexi car loan scheme available in Malaysia.
What is a Low Interest Car loan?
It is a type of car loan that charges lower rates of your interest on your principal amount.
Do banks charges higher rates of interest on foreign car loans in Malaysia?
No. Banks does not charge higher rate of interest on foreign cars. Rather, the foreign car loans come at a lower interest rates so as to attack buyers.
What is the average rates of interest charged on car loans in Malaysia?
The average rates of interest charged on car loans ranges between 2.15% to 5.8%. This is inclusive both used and new cars.
News About Car Loan
Mercedes -Benz Malaysia records a growth of 17% in 2016
One of the leading car brands in Malaysia, Mercedes-Benz records a growth of 17% by delivering 6,017 cars to customers in the six-month period ended June 2016. With a year-to-date market share of 2.5%, Mercedes-Benz has been able to retain its position as the leading premium car brand in Malaysia Besides, Mercedes-Benz Malaysia service network has serviced nearly 52,700 cars in the first half of 2016 which is an increase of 18% compared to the same period in the previous year.
Mercedes-Benz Malaysia focuses on providing improved products and services to the Malaysian customers by addressing customers touch points and providing enhanced retail services to customers.
25th July 2016
Volume cut in car sale forecasts not ruled out
There could be further cuts in the volume for automotive industry. MIDF Research explained that the year to date total industry volume works out to be around 550,000 which accounts to 88% of the 2016 forecast. Malaysia Automotive Association announced a cut in 2016 total industry volume from 650,000 to 580,000. The June sales were flattish but strong month on month improvement. MIDF Research expects the July numbers to weaken because of the festive holidays and auto plant closures. MIDF Research however foresees a nation car improvement in the market share.
22nd July 2016
Car Prices Still Expensive, Despite National Automotive Policy 2014 (NAP)
Did you know that Malaysia is the second most expensive place to purchase a car globally, lead by Singapore. But this has been a trend for years. However the National Automotive Policy 2014 (NAP) was announced in 2012, followed by the 13th General Election making where people in the country were promised gradual reduction of car prices up to 2017. Standing at the 3rd quarter of 2015, no reduction in terms of car prices have been observed in Malaysia.
The main reasons for high prices of cars in the country is due to the 30% import duty imposed on vehicles imported from non-ASEAN countries, against no duty charges on cars from ASEAN countries.
The tax rate and excise duty imposed in Malaysia is considerably high as well. According to Malaysian Automotive Association (MAA), excise duty ranges between a whopping 65% to 105%, over the 10% sales tax.
Federal Government’s Revenue for the Year 2014 by the Ministry of Finance, Malaysia reports that, the import duty collection on cars for 2013 is approximately RM 2,417 million compared to 2012 collection amounting to RM2,282 million.
7th September 2015
Car Loan fix for nabbed illegal taxis
Land Public Transport Commission has nabbed several taxis over illegal taxi services. These cabs are awaiting trial while loan lenders have been after the cab owners to pay their pending car loan amounts. Many of these taxis are being used for cab service providers like Uber, GrabCar etc. Even when the court has delivered verdict of stripping owners off their ownership of these vehicles, the owners need to pay the car loan due on these.
Malaysian law forbids the use of personal cars to provide public transport service by charging a fee. Once the vehicle is forfeited, it becomes property of SPAD, which can then either sell it off, or auction it. Around 96 cars have been sent to the SPAD parking since the crackdown on illegal vehicles. Section 80 of the SPAD Act empowers the organization to confiscate any vehicles that are found to break the law and run illegally.
18th August 2015