With speculations that the International Trade and Industry Ministry (Miti) may be looking to reduce excise duties, Malaysians might hold their horses in buying a new car and anticipate if this reduction may result in lower car prices.
This would be a step in progressing the development of the local vendor ecosystem through the procurement of more locally produced vehicle components. While there are no fixed promises, we can only await more details on possible changes regarding excise duty and incentives.
In the meantime, it is wise to note that getting a car can be a lengthy journey to prepare for. So let us drive you through the process of buying and acquiring a new ride so that you can jump into the driver’s seat as a new car owner as smoothly as possible.
1. Before Buying
Looking for the right car
We all have our own personal needs and preferences when it comes to driving. With the array of cars available in the market, there is bound to be one that suits you if not entirely, at least sufficiently. Take some time to learn more about the most commonly available features and most recommended ones to have especially when it comes to non-mechanical aspects. The basics to weigh out and evaluate should include:
- Your ‘must-haves’ and ‘nice-to-haves’; a large boot space might be a necessity and a sun roof would be a nice to have.
- Number of passengers and cargo capacity (on a regular basis)
- Petrol mileage
- Additional features e.g safety, entertainment etc.
- Your activities and location e.g. the need to carry sports gear or have a sturdily-built car to drive through mountain ranges.
Local or Foreign?
It is generally a lot cheaper and cost effective to purchase Malaysian-produced cars. Foreign vehicles come with a hefty excise tax between 75% – 105% which causes car prices to balloon up by double or triple the price compared to that in other countries. However, as Malaysian cars are generously subsidized by the government, brands such as Proton and Perodua can provide you your basic driving needs without swallowing up a small fortune.
Take a test drive
The importance of test driving certainly has been down-played with the current abundance of online resources and reviews available. But no matter what, it is always best to experience a car for yourself. Make a visit to the nearest showroom or dealer to understand what’s in it for you. Variables such as the seat adjustments, steering wheel, control and gear layout will differ from car to car therefore making it essential for you to know what you’ll be driving home at the end of the day.
Perhaps you can even take some time to talk to other drivers or friends about their car driving experience, better yet if they own the car you’re looking to buy yourself.
Car rentals can also come in handy when you urgently need a car but do not intend to make an impulsive permanent decision. In fact, you could even consider it as a trial period before the long term commitment. Kwikcar provides ample choices at an affordable price for you to experience this.
Budget and Money Matters
Know what you can afford based on your income and set a realistic budget, a handy tool to have a rough idea about this would be car loan repayment calculators which are even available on some of the car brand and local bank websites.
The cost of buying a car does not end with the price you see on paper, as there will be regular monthly and annual expenses including road tax, insurance, car servicing and maintenance, petrol and so on. For a car with an average market price of RM50,000 and power of 1,400cc, here are some additional annual costs that you may need to be aware of:
- Road Tax – RM90/year
- Insurance – RM1,500/year
- Service and Maintenance – RM1000/year
- Petrol – RM2,400/year (RM200/month)
*may vary according to usage and location of driver
Financing My Car
When applying for a loan to finance your soon-to-be purchased car, here are some features that you would need to compare across banks before finalizing the agreement:
- Margin of finance on dealer’s invoice (may range from a maximum of 80-90%)
- Financing period (usually a maximum of 9 years/108 months)
- Interest rate (fixed/variable, may range between 2.50%-4.00% as seen here)
- Types of vehicle (new or used, MPV, Sedan, SUV, etc)
- Repayment methods involved.
- Eligibility and requirements
Where to find a Car?
Safe to say, all car brands in Malaysia have ample contact information or forms that you can register your interest with on their localized websites, sometimes even providing a complete list of recognized dealers and affiliates.
While buying second hand cars give you negotiation power and saves you a large amount up front, bear in mind that there are inevitable risks when it comes to buying second-hand cars so be sure to be meticulous in evaluating the condition, history and background of the pre-owned car as well as who you’re dealing with.
2. Car Purchase Process
Once you’re all set on getting the car of your choice, it’s time to take on the legal papers and official documentation. In order to complete the basic steps of registering your car, applying for a loan and applying for road tax and insurance, you’ll most likely need:
- Copy of IC/Passport;
- Copy of valid driving license
- The latest 3 months payslips
- The latest 3 months bank statements reflecting credit
- Income tax/Employees Provident Fund (EPF) statement
When buying a new car, the seller or dealer should be handling all the documentation and paperwork for you to acquire the car. Once the car has been registered with the Road Transport Department of Malaysia, you’ll receive a number plate and be free to arrange a pick-up or delivery time for your car.
To maximize and prolong the optimum functionality of your car in the long run, the follow up servicing and maintenance of your car is absolutely crucial and not to be taken for granted. Each car manufacturer has different recommendations for each mileage stage to keep your car running at its best. While your car is still under warranty, it would make the most sense to utilise any guaranteed benefits or free services.
You never know when you might bump into car troubles, so always keep your insurance company’s number at hand. Depending on your car insurance policy, most would offer a convenient 24/7 towing service to bring your car to the nearest car repair workshop. Be sure to know how long repaired parts or changed components are under warranty.
And there you have the basic steps in getting a new car. In the next article, we’ll break down a more detailed perspective on what the price tag that comes with owning a car entails. For a fact, did you know that car ownership is a major cause of bankruptcy in Malaysia?
Still undecided about buying a car but need one? Rent a car at Kwikcar, Malaysia’s first peer-to-peer car sharing platform at the most affordable price!