If you are thinking of opting for a car loan to purchase a vehicle, you need to consider the types of car loans that are offered in Malaysia. A car loan is offered for a brand new vehicle as well as to purchase a used car. Taking into consideration what type of car you are purchasing, you need to choose the car loan scheme wisely. Here’s a roundup of the characteristics of new and old car loans and which are the best ones available in Malaysia:
Differences Between New Car Loans And Used Car Loans
- Types Of Car: The loans can be used for the specific type of car. New loans can only be used to purchase new cars whereas used car loans are offered only on used cars.
- Resale Value Of The Car: The margin of financing offered is more for new cars since it has a greater resale value as compared to old/used cars.
- Margin Of Financing: The margin of financing offered by new car loans is much higher as compared to the margin of financing offered by used car loans. New car loans offer a margin of financing around 90% of the on-road-price of the vehicle with some packages even offering up to 100% margin of financing. Used car loans on the other hand only offer a maximum margin of financing of up to 85%.
- Age Of The Vehicle: This criteria applies only to used cars. The age of the vehicle determines the margin of financing offered. Since used cars have a lower resale value, banks offer a lower margin of financing for older used cars. Once the used car has crossed a particular age limit, no financing will be offered for its purchase.
- Interest/Profit Rate: The rate of interest or profit rate offered on new car loans is comparatively lower than that offered for used cars.
Similarities Between New And Used Car Loans
Even though the new and used car loans have intrinsic differences, they do share some similarities which are as follows:
- Tenure: Both loans offer a tenure going up to 9 years.
- Banking Principle: New and used car loans are offered both in Conventional and Islamic banking formats.
- Make Of The Car: Both the loans can be used to purchase national or non-national cars.
3 Best New Car Loans In Malaysia
- BSN Hire Purchase: Margin of financing is provided up to 90% for this type of loan scheme. Where the maximum tenure offered is of 9 Years. The interest rate range from 2.55% p.a. to 3.15% p.a. The new car loan scheme is open for government sector employees, public listed companies and salary holder employees.
- Public Bank Car Loan: The loan is offered with tenures of up to 9 years with 90% of margin of financing (MOF) for new passenger vehicles. The MOF for a commercial vehicle is up to 80% of the price of the vehicle.
- Bank Muamalat Hire Purchase-i: It is a flexible type of loan scheme offered by the bank at more than 57 branches and service centres across the country. The loan is car financing quickly with a shorter approval span to the individuals between 18 and 55 years old.
3 Best Used Car Loans In Malaysia
- Affin Bank Hire Purchase (conventional): The loan is offered at a competitive rates with a margin of financing up to 85% for a used vehicle. The loan tenure offered for a used car purchase is up to 9 years.
- AmBank AUTOMate: Both local and foreign used cars can be purchased through this loan scheme with a margin of finance of up to 90%. Also, you are entitled for statutory rebate on the unexpired rental period on this type of loan scheme.
- Hong Leong Auto Loan: With up to 9 years of tenures available for a customer, the loan scheme offers competitive interest rate to a customer. The current flat rate is 10% p.a. and the floating rate financing is calculated with formula: (BLR + Spread) % p.a. at a minimum of 7% p.a.
Regardless of which car loan you opt for, always make sure you thoroughly compare various loan options to ensure you get the lowest profit/interest rate and always go in for a loan amount that you can afford and easily repay.