Expect 10 percent Slash in Used Car Prices


Kuala Lumpur: The value of used cars may come down by 10 per cent from May.
The move is in line with the price reduction of new cars under the National Automotive Policy (NAP).
This will result in buyers securing lower loans.
Federation of Motor and Credit Companies Association of Malaysia secretary-general, Khoo Kah Kin, said they had been notified of the matter by financial institutions.
The amount of loan disbursed by financial institutions is tied up to the value of the vehicle. For instance, a car valued at RM40,000 by dealers will be assessed at RM36,000 by financial institutions.
And as the standard practice by banks is not to give 100 per cent financing, purchasers will end up with lower loans.
The federation was still waiting for the guidelines from financial institutions before implementing the new measure.
"Dealers will not have any problem with the new measure as the ones to feel the brunt are purchasers, especially those whose vehicles are repossessed. As the value has dropped, the loan's outstanding balance will be higher."
Malaysia Automotive Association President Datuk Aishah Ahmad said used cars dealers had to restructure their pricing to reflect cheaper costs.
In the Klang Valley the prices of locally-assembled used cars have been reduced by between RM2,000 and RM3,000 and imported ones up to RM10,000.
A used car dealer in Selayang said it had no choice.
"A car priced at RM93,000 is now sold at RM83,000. It is better to dispose of them now and not make any profit than keep them and continue making losses."
Another company said it was in trouble as it had some 1,000 used cars in its stock.
  ¶ 4:45 PM