Step 3: What are your upfront costs?

1. Your downpayment

2. Processing fees

3. Other fees

  1. Your down payment

 

Car loans in Malaysia are usually called ‘hire purchase loans’, and most banks will require a guarantor before granting you a loan if you’ve been working for less than two years. 

 

You’ll need to pay a down payment of at least 10% for a new car and 15% for a secondhand car, although this may vary from bank to bank. 

 

 

⚠ Our money-saving tip: When it comes to paying the down payment for your car, pay as much as you possibly can!

 

Car loan repayments in Malaysia are calculated with flat interest rates. You can reduce the amount of interest you pay by a lot if you take on a smaller loan. 

 

For example, let’s say you want to buy a car for RM50,000.  The difference between taking a loan for RM45,000 (i.e. 90% of the car’s value) and taking on a RM20,000 loan (40% of the car’s value) is huge. Let’s assume a 9-year loan at 5% interest: You’ll spend a whopping RM11,250 extra if you get the RM50,000 loan. Don’t forget, you are getting the exact SAME car!

 

Step 3: What are your upfront costs? 1 - Multiply -

*Assuming a 5% interest rate and a 9-year tenure

  1. Processing fees (if you purchase a vehicle through a secondhand car dealer)

 

If you purchase a car through a secondhand car dealer, they’ll sometimes charge you a processing fee. This fee varies from dealer to dealer. Make sure you check beforehand to understand specifically what your dealer is charging you for. Remember to check this cost when you’re looking at the purchase price of the secondhand vehicle! 

  1. Other fees (if you purchase a vehicle from another individual)

 

Instead of doing it yourself, you could hire a runner to handle the paperwork process for you. Some runners charge up to RM150 to handle the PUSPAKOM inspection, RM280 to handle the JPJ transfer application (the processing fees are charged on top of this), and they also charge a fee for assisting with the insurance purchase and road tax renewal, so make sure you shop around and compare the fees if you want to hire a runner. 

 

Additional costs for secondhand vehicles: 

 

    • PUSPAKOM inspection certificate.
      The PUSPAKOM inspection process costs RM30. Please note that there’s an extra RM60 fee if you are getting a loan for the purchase as you’ll need to conduct a Hire Purchase inspection as well. For more details, check out: http://www.puspakom.com.my/transfer-of-ownership/

 

    • Proof of insurance.
      You should purchase a new insurance policy for the vehicle as well as renew the vehicle’s road tax if required.

 

 

You can negotiate with the seller to determine who will pay each some of the fees we talked about above. 

 

 If you are busy, you can take advantage of popular websites like https://www.mymotor.my/how-it-works that can help you handle the paperwork without any extra fees and surcharges.

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