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Are they sound of mind buying a car on 7 years loan?
What is the value of the heap of rust after 7 years........
The maximum for a car finance should be 5 years, with a finance of 80%.
Otherwise dont buy because you even cannot afford petrol/maintenance

I agree with you whole-heartedly on this, Albert. However, this sad state of affairs are the doings of our very own Govt. By erecting high trade barriers and adopting a protectionistic policy in the interest of our national cars, they have forgotten about the interests of the normal man on the street. Today, cars are priced beyond the means of the majority. Hence the creation of 7-9 year car loans.

On a dollar for dollar basis, cars are so much more affordable down south. For instance, a Vios costs only SGD50k (vs RM84k here) whereas the newest Honda Civic (CBU Japan vs CKD Pagoh for Malaysia) costs SGD75k (vs RM113k here). Mind you, interest rates are also much lower. The purchasing power parity must be taken into consideration at all sectors of the economy. So are cars really cheaper in Malaysia than in Singapore? The answer is a resounding 'NO!' The word 'cheap' is always relative.

These things only happen because we the consumers are taken to be a dumb lot...we don't look at the bigger picture in terms or loan repayment..We get suckered by "low affordable monthly repayment" rates but don't stop to think that these involve long term commitments for 9 years!! I mean come on..things happen..u get married, u need to buy a house, build a family, which all require long term financial security..every family needs two cars these days...u can't be tied into $1,500 or more worth of car loan repayments every month for the next 9 years...as if cars could last 9 years these days..we consumers are a screwed lot....with a big sign hanging on our backs and an arrow pointing downwards.."Screw here"...

what has AAB gotta say abt this? Another plan that backfire. BLR went up almost immediately but changes to FD rate was slow in implementation. What is BNegara doing abt it? Seriously, who is looking out for us Rakyat?

"A give-away that's a taken-away. It comes from the right-hand pocket of the Treasury, and goes back into the left-hand pocket of the Government."

Is the above statement really correct? The reduction in taxes would mean less income to the Government (assuming the demand for cars is inelastic) while an increase in interest rates means more money to the banks isn't it?

Anyway, I look it it from the point of view that if our benevolent and magnificent Government did not reduce the tax, we will be paying even more. Three cheers for our BN Government is in order here! Who says BN stands for Barang Naik?

In Hire Purchase, there is this thing call "Early Settlement".

Meaning a rebate is given if a hirer decided to pay off the loan midway to change car for example.

Unlike Housing Loan, the HP Act provided that interest be charged "only" when the payment is due.

So :-
1. if you decide to use the car for its entire loan tenure, you'll have to pay everything
2. if you decide to change car midway, you'll get rebates - hence stop talking about whatever left-in-right-out

The NAP still give comparatively cheaper car, and lets don't forget the NCB transfer that you can enjoy on your new car.

i think you are overeacting to this rate increase. Interest rates has been creeping up and it will go higher still. Blame it on supply and demand thing. Banks have to be more careful with their car loans after all cars are not exactly "fixed" assets. I guess the party is really over. No more cheap money, back to the days when I started buying a car, 20% down, 10%H.P. Ahhh the good old days...

Guys, get your facts in order before you comment:

1. Proton is offering 9 year financing for some of its models. The Waja, for example, can be yours for RM 2000 downpayment and the balance financed over 9 years.

2. Interest rates have been creeping up since the second half of last year, so it's not something that was introduced following the NAP.

3. Interest rates on car loans are charged on a "flat" rate per annum basis. Even if your principal outstanding is reduced over time, this is not taken into consideration, and even when you are into the final year of your car loan, you are still charged the same amount of interest as in your first year. Technically, therefore, the effective interest rates charged by the finance companies based on loan outstandings are roughly twice that of the flat annual rate. So if the car loan is 3.5 pct, you are effectively paying 7 pct based on the reducing principal. In some countries like the UK and Australia, laws force finance companies to spell out what the effective financing rates (or APRs) are in their advertisements. In Malaysia, keeping the truth to the ignorant seems to be the norm.

4. If you prepay i.e. you pay back your loan earlier than scheduled, you will get a rebate, but it will be nowhere close to a full refund of the interest which accrues to maturity. The finance company imposes a hefty penalty before giving you a rebate.

How many people read the fine print before taking on a car loan ?

typo: "....keeping the truth from the ignorant seems to be the norm..."

Hi all,

A lot of points has been shed on this issue about car prices, car loans, increasing interest rates & how, we, the consumers being screwed and all, but my question is this:

Knowing the predicament that we're all in, can anyone offer any suggestions or solutions to stop, we, the consumers, to be continuously being duped/screwed/lied to by the government/finance institutions/car companies etc?

Interest rate has been shooting up so much across the world led by the US and it would continue to shoot up,said Ben Bernanke.
M'sia is the last in the region to raise its rate by reluctance.Unlike others whereby the rate of deposits account will usually go up first before the lending interest rate or at least both go up simultaneously.
Here,banks'lending rate will go up once the central bank raise the rate BUT deposits rates are NEVER adjusted and just remains the same.
This kind of practice is aimed at protecting the banks' profit margin xpecially the inefficient one.Or else they might looked very ugly in the eye of foreign nvestors.
This is of course done at the costs of its depositors xpecially senior cizitens who living on their FDs' interests. This definitely has nothing to do with young people since they have no savings and moreover living on their credit cards.
Just wondering is such a practice a strategy to build a "regional bank".If it is,then no point spending billions for takeover spree.
Depositors,don't be pissed off,there are some other alternate currencies which give better returns for your hard-earned savings,AUD is very cheap while SGD is not bad too.

There is no "really" need to read the fine prints - Godfather.

All loan particulars are printed in the Second Schedule (including the effective rate a.k.a. APR - Annual Percentage Rate) and applicants do not need to pay a sen for the document (HP Act 1967), hence no need to commit to the loan if one is disagreed.

Bragging about lower car price - increasing interest rate - losing out in the end. Did anyone really expect to make a profit from any forms of loan?

Car saleperson, hate them but can't live without them. Banks and finance companies will soon charge you money to put money with them. Why? Because the profits are not big enough and since everyone is being told to tighten their belts, the banks are sure that little more does not matter.