Should you buy a new or secondhand car in the coming months?

Looking at historical market trends, the period following Hari Raya Aidilfitri usually sees sales of motor vehicles slowing down. It’s natural that after the big push before the festive period, most people have bought their new vehicles and there will be less wanting new vehicles for a while – usually two months. So it may only be in August that the market will pick up again.

However, this year may be different as an unexpected element has been introduced by the new government. The Goods & Services Tax (GST) which was applied from April 2015 was removed at the beginning of this month, meaning that virtually everything you buy – including cars – would be cheaper since you would not have to pay the 6% tax to the government.

The omission of tax (actually zero-rated until its removal is passed by Parliament) will be for the months of June, July and August 2018. From September onwards, Sales & Service Tax (SST) will be introduced and then prices will be revised again.

“The recent declaration on the abolishment of the GST is foreseen to change the situation and we believe that now is the best time for consumers to purchase a new car as the implementation of SST will likely take effect in September. According to various sources, vehicle prices could go up following the return of SST. As mentioned by the President of Malaysian Automotive Association, Datuk Aishah Ahmad, car prices will increase when 10% SST is in place,” said Abdul Rashid Musa, CEO of Proton Edar.

Depending on the budget available, there’s obviously a wide range of a new and used cars available in the market. However, Encik Abdul Rashid recommends new cars because it is easier to get hire-purchase loans and the interest is also lower. “Loan approvals might be easier to obtain and interest rates are lower as a new car poses lower risks, hence, resulting in higher loan amount that could be offered,” he explained.

“In the used car market, due to the stiff competition, sellers have generally absorbed the GST so the differences in pricing might not be noticeable with the tax removed. But understandably, for those with a tight budget, a used car may be more appealing as the cost comparison would be more reasonable and practical,” he said.

Nevertheless, even with a limited budget, there are still new models which are affordable, especially in the 1.3-litre segment. “Take the Proton Saga, for example. If you look at the maintenance, space, safety and stability aspects, the Saga is the clear winner when compared to other choices in the market. It offers great ride and handling and if you pay a bit more for the premium model, you also get Electronic Stability Control and Traction Control systems,” he said, adding that the low maintenance has been found to be a key factor in many Malaysian choosing the model.

“You may not realise that you can get a Saga for less than RM30,000 and that’s the best price we have offered it in over 10 years. Plus, with a brand new car, you also get a factory warranty for peace of mind,” Encik Abdul Rashid said.

He also mentioned that Proton will show its support for the Tabung Harapan Malaysia initiative by making a donation of RM10 for every Proton car sold between June 1 and December 31, 2018.

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[Chips Yap]