Here’s something that could be a real boost to the automotive industry, not to mention a crowd pleaser. According to Sin Chew Daily, the upcoming Budget 2017 may include excise duty exemption for first car buyers.
The Chinese language daily said that the scheme will be for young people within a designated age group, but will not be limited to the purchase of cars from Proton and Perodua – foreign brand vehicles that are CKD locally assembled will also be included.
The report’s unnamed sources said that the Customs department will determine the list of cars that will benefit from the scheme. The source also mentioned an engine capacity cap. However, with some luxury and performance cars now embracing downsized turbo engines, a pure “cc limit” could be breached by the likes of the BMW 318i (1.5L), Mercedes-Benz C180 (1.6L), Volkswagen Jetta (1.4L) and Peugeot 208 GTi (1.6L), among others. There will be more filters for the final list, surely.
The report adds that in concept, the scheme will level taxes for all locally assembled cars, whether from a national make or a non-national brand. At present, all CKD and CBU cars are subject to different levels of excise duty – CBU import, foreign brand CKD, national makes. The scheme will not benefit CBU imports.
Should such a scheme come to fruition, manufacturers and buyers will be rubbing their hands in glee, and the current weak market sentiment might receive a temporary boost, but experts caution that it will create market distortion. If not implemented well, it will also add to Malaysian household debt levels, which are already among the highest in the region.
Also, with every high, there’s a hangover, and a temporary boom is likely to affect future demand for cars. The Thai car market contracted severely after the country’s December 2012 expiry of a first-car scheme, which started in September 2011. The government gave a 100,000 baht tax refund for first-car buyers opting for a locally made car priced below one million baht, with an engine no bigger than 1.5 litres.
This is not the first time that we are hearing of a “first car scheme”. In late 2014, minister of youth and sports Khairy Jamaluddin proposed a “Youth First Vehicle Scheme”, where young adults earning below RM4,000 a month can buy their first (locally assembled) car tax-free.
Here, we calculate the actual savings such a scheme will bring to a first-time car buyer in terms of monthly instalments, based on the typical 10% downpayment and 3.5% interest rate, over a seven-year tenure.
We pay three different kinds of tax on our cars – import duty, excise duty and GST. The prices below are Peninsular Malaysia vs Langkawi duty-free prices for a selection of national and non-national cars (entry-level and range-topping variants shown). For Perodua, it’s Sabah/Sarawak prices vs duty-free Labuan prices as we do not have P2’s Langkawi price list.
In this best case scenario, which scraps off all three taxes (the current reported version removes just the excise duty), monthly savings add up to between RM22 to RM253. Of course, the tax savings for the CKD Hondas and Toyotas are much higher than those for Peroduas and Protons.
So, will such a move truly benefit everyone? It was reported that the good intentions of the then Thai government cost it US$2.5 billion (RM10.48 billion) in tax income, according to World Bank estimates. It also left more than 100,000 indebted customers defaulting on their loans because they couldn’t afford to buy new cars under normal circumstances. Of course, owning a car isn’t just about the monthly instalments – there are many other costs involved such as insurance, fuel and parking, just to name a few.
The situation would probably be the same or worse should such a scheme be introduced in Malaysia. As the figures show, we generally aren’t averse to taking on more debt (household debt is RM1.03 trillion or 89.1% of GDP, and counting) and giving fresh grads an “extra excuse” to buy a new car may be bad for their long term financial health. With RM1,000 per month less in savings, that elusive and expensive first home will be even harder to achieve.
Also, lower car prices will not necessarily mean that young adults will have more money to spare. It’s likely that many will take the opportunity to use the original budget for a “bigger” and more expensive car (monthly budget now allows for a Jazz, instead of the original plan for a Myvi, for instance). What do you think? Will the mooted “first-time car buyer” scheme bring benefits to the target market?
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I’m a 20year old teenager, OTW to graduate really soon. As tempting as it sounds, I don’t think this is a good idea.
I completely agree on what editor said, cuz youngsters mentality nowadays really brand bias, they most likely max out the advantage they have rather than settle down for a humble national car.
Yeap. Even if it’s out I would still chose a second hand car as my first car.
Sorry lah, don’t want get CCRIS at all.
Same here
-95s’
Glad to see young people with this kind of mentality. Keep it up man!
p/s: you would need some record in CCRIS (a good record of course) for the banks to easily approve you housing loan. (or any loans)
All the blacklisted siblings or parents will force these fresh grads to giving their names for a new car application for their past sacrifices and expenditures during studies.Instead they will be given a 20 year rusty old car for a replacement as work transportation.
Dun worry. Party Hard will be there for u when wanna demo against PTPTN for putting u in CCRIS when no pay back.
So jangan bimbang, Party Hard dahulukan ketamakan orang muda.
Somehow smiled reading this. I genuinely hope most people your generation have your sort of mindset. Financial soundness seem to be nonexistent when it comes to those of my age group (25-30)…what with the ridiculous spending on stuff that are EQUAL to their monthly salary!
Cuz, the fact was,
within 20k there’s load of car you can choose from,
from humble saga to persona, vios, all of them you can choose.
I personally would love to have a Gen2 cps or Satria neo, satria GTi as my car and FXXX that brand bias shit cuz they all gonna depreciate anyway.
There is much more thing to concern and spend on other than cars and “pride”.
who suggested & approved FIRST TIME CAR BUYER = SOHAI yang OTAK UDANG. Scenario case as follow:- SOHAI #1: 48yrs, work 30yrs since 18yrs old. Small salary kerja kampung rm600/month, keep hard earn money for 30yrs just bought Iriz on Aug’16, but NOT entitled for FIRST TIME CAR BUYER. SOHAI #2: 20yrs old, small salary 1100/month. Work since 18yrs old Hard earn 2yrs money just bought PERSONA July’2016. NOT entitle FIRST TIME BUYER. SOHAI #3: UNIVERSITY graduated, work 6 months just bought SAGA 1month ago, NOT entitled FIRST TIME BUYER. TRADE-MAI #4: University graduate, high pay 3000/month, not yet buy car. ENTITLED FIRST TIME CAR BUYER.
<CORRECT = all Msian should entitled 1x time car purchase of free TAX DUTY)
Should implement like RPGT exemption . 1time tax waive . I think thats more pratical for all . But its better than nothing , hope this 1st car buying scheme will be real soon =)
Good for first time car buyer. Some saving will help.
If their spending is not equal to or more than their monthly salary, then their not YOLO-ing enuff.
Many might think this is very good move but now is the time for us to be really worry.Goverment is in panic mode as most of economic data indicators show our economy not as their projection but going downwards worst than predicted.This is a dumb tool to force jumpstart banking institutions and stale financial growth.The idea is to make us spend more money but since our household debts is at 90%,government at this last resort by targeting young fresh grads to spending vigorously.Yearly budget at fiscal deficit,national debt at highest ever,low FDI and just around 4% GDP unsustainable for developing nation like Malaysia.As interesting this scheme might look,once you trapped in this dumb plan say bye bye freedom for the rest of your life.
I think they will limit to just P1 and P2 basic models
Agreed.To move a developing nation like Malaysia to well developed nation like US or Europe or even Singapore,a minimum 10% GDP required to be achieved for this year till 2020.Then we can be a high income nation or well developed country status.While for a well developed countries a mere 2-3% GDP growth is consider as great achievement.So our government proud of previous 5-6% is underachievement rate.Be noted pls.We were misleading by government by their false achievements.
The ministry finding a wrong way to help the young generation… If Govt really sincere SHOULD just help all low-income families and employees on zero tax duty!
Says help the public, but in actual fact helping car manufacturers, especially Proton.
If first time buyers cannot afford, there’s plenty of cheap second hand cars in the market. You can even buy an old Kancil/Wira/Saga for rm2000. Why burden our young and expose them to bankruptcy?
Agreed
Oh my! Will increase the number of bankruptcy at age 25-30
That humble national car should be the one that is from our local brand and a Toyota-sourced engine. Only one with deep pockets would want a Vios when they can get something of a similar quality with almost half the price.
A 20yo describing himself as a teenager lolll
“A teenager, or teen, is a young person whose age falls within the range from 13–19. They are called teenagers because their age number ends with “teen”.”
https://simple.wikipedia.org/wiki/Teenager
last leg of teenage mah. why, it makes you happy when i describe myself as apek izzit?
Fresh graduate buy Vios 2nd better! Reliable & good RV! Dont eksen2 buy new Vios car to show off your graduate image! Pay your PTPTN first!
This is very tricky …
The gov already not enough money and yet they want to reduce their income by removing excise duty for this? What is their motive behind this =_=
Hmm something fishy here….
Buy new car and register as Uber driver. Let somebody else pay for monthly repayments, maintenance, fuel, foods, took and almost everything else. Duit gaji boleh simpnan meh.
i will use my son name to buy vios TRD..and i sign the penjamin
My son is still 10 years old.. Can i use my son name & i sign as the grantor? Haha!
Imho, I don’t think the govt should reduce car prices until they introduce a new vehicle scrapping schemes whereby old cars are to be scrapped and owners compensated for it. That way, cars on the road would be less, while reducing car prices will spur local automotive industries and hopefully reduce household debts in the long run. The govt should also consider limiting car ownership pending settlement of car loans or at the very least after few years of car ownership to ensure household debts continue to be at a moderate level. Lastly, improving further public transportation in Klang Valley.
I foresee the bulk of these buyers to take it as an opportunity to “upgrade” beyond what they can actually afford. Consider the maintenance costs as well… maintaining an Axia/Myvi costs a lot less than the popular Japanese/Continental makes. To truly cull those who attempt to buy beyond their means, it’s BNM that needs to regulate the banks’ loan pricing. Probably not as drastic as Singapore but something around the likes of a 7 year at 80% margin of financing at max, for starts…no more 9 year 100% loans, it’s causing more harm than good in the long run.
to show 30% price reduction before next poll. surely victims is fresh graduate.
Scrap all the taxes for the young first owners. Get them to repay the ptptn. Give them space to breathe. Maybe, once they earn rm5,000 monthly, then bn can consider them just like the others.
Too bad…ptptn dah blacklist.
this scheme not only helps automotive industries but also BANKS and Insurance Companies! More young gen will becomes debt slaves…
Unless other then excise duty exemption, Free Service from Auto Makers, Bank zero interest rates and Gov subsidize special insurance policies for these youngster….
owning a car is not like owning a Rm500 bicycle that bought using cash….
neonceejay, U are a smart young man judging from the way you tell your reason’s why it will not work.
I am skeptics by the many “IF” & “BUT”. There is also no VERIFIED source to claim that this is a credible info/news.
If its true, Thailand will be the best case study to debunk M’sia from implementing this scheme.
IMO, there is already too many cars on the roads & there is also too many bankruptcies & Kereta Kena Tarik in the Bengkel waiting to be Lelong on every weekends.
it will be a good move only if it will be limited to perodua & proton cars.
to me, this is just a farce to “pancing undi” from the young voters
Last sentence is the ultimate truth.
P1/P2 buyer will eye Honda/Toyota/Nissan/Mazda
the Jap car buyer will eye the entry level European marques (VW/ Ford/ etc)
Young exec who just started to get decent salary would jump on the gun to buy BMW/ Mercedes/ Audi.
This will be financial disaster if implemented.
Please don’t , there is no urgent need for new cars , there are loads of second hand cars on the market . Short term handouts never do anything for the economy
But if you are planning a general election of course all logic goes out the window
A half-past-six idea will have a half-past-six result.
If this scheme do go through, I’m afraid many people will be frustrated due to increase in traffic jam not to mention increase in debts bcos many new buyers will be saddled with 10 years of loan together with many others expenses that go with owning a car like parking, tolls, tires, battery, fuels & insurance.
Haiz… how many times got fooled already? Each time near election every 4 yrs BeeEnd will float such news to gain market sentiment. My 2 pence, aint gonna happen again. Just enjoy this ‘illusion’ for the coming months.
Hello kerajaan, how about developing cheaper homes for the rakyat?
Cheaper homes alredi got but all bought by pipu with 5 super bikes & luxury cars. Oh wait, that only happens in….
From the view of saving %, the greedy Perodua and Toyota earn a lot of profit
No. I say increase taxes on cars. Too many cars in the streets.
Cars are not for the poor. It should be a luxury. When you are poor and buy a car, you most likely cannot afford to maintain it and this creates reliability and safety issues which in turn causes traffic which then causes stress and this will result in fights and this causes health issues and the poor cannot afford proper healthcare and they will flock the free clinics and government hospitals and this will increase the government’s burden and will affect the country’s economy.
So why not increase tax and make profit from it, instead of trying to please ingrates who will vote for the opposition anyway?
Wah liao…One can get a Sportivo Vios using our first time buyer sons/daughter’s name at RM77K.
Sounds tempting for those like Sam Loo.
Saved rm 19K!!!!
I m sure u cannot be sending people to check whether the dad or mum or auntie is using the excise free car,right?
In the Watergate scandal,no one is checking for the last umpteen donkey years until last week.
No one has time for that ‘LEAKAGE”.
Very tempting ,this offer.
Buy Toyota and rolls Royce.Got RV.
The car they can buy must be in their salary bracket. E.g. salary below 3k can only buy car cost below 50k. Salary 3-5k can buy car cost below 70k and so forth.
Should be open for ALL malaysians who never buy a brand new car regardless of their age (well.. maybe below 50 years old).
Options of eligible car could be only for car priced (without taxes) at 150k or less.
Those with salary below RM3k shud buy cars below RM25k. And those with salary around RM6k shud buy only cars below RM50k. Gen Y nowadays are buying cars which they cannot afford.
If u run a company, sure bankrupt. No basis at all to support ideas
income 3k cuma layak beli kereta bawah 20k. aku 6k income pun cuma beli 2nd hand cash 15k car.
Why not just limit it to Proton, or, Proton and Perodua?
Make it completely tax-free for Protons, under this scheme.
I think Proton is making improvements.
Well, instead of limiting the type of car for them to choose, why not put a max amount of monthly repayment based on their salary? Have to pay cash upfront for dp, no loan. Any loophole in it?
Looking forward to a locally assembled Ferrari.
2017??!!! Sigh… What about PM’s promise to the public on his GE?
This is just a mere proposal so don’t get overly excited and have high hopes of owning a tax free car.
Excise duty is a main source of income for our government and with AP holders still around ,
don’t ever dare dream that this would happen.
Its just a feel good proposal that makes the rakyat in general think that their concerns are being looked into. Bercukurlah !!
Rich mommy and daddy will use their kid’s name to buy a new mercedes
My advice to those below 30, dont be tempted by it. If need be buy a 2 nd hand car, NEVER buy new. Buy a house before getting a new car, ignore peer pressure. A car is a depreciating liability, while a house appreciates its value over time. I’ve followed a wrong path before and suffered. Follow me, I was debt free by 40, then you can buy a new car, cash!
Dun agree to buy a house. Price of house keep on increasing becoz lots of demand!! Shld stop 1yr from buying. Then it will fall back to reasonable price…same like car. Msian things r damn high price now…but salary low..weird!!
Last week some brilliant proposed(cancel later) ERP system to enter city, because want to limit traffic. Now another brilliant want to introduce first time buyer special scheme to increase local car sales. Why so contradict each other?? If this is the plan, then why build MRT/LRT? Why these brilliant cant discuss first abt the real issue before proposed something??
Please introduce Scrap 20yrs old car to reduce before promote something to increase the volume. We already facing jam everytime, is it want to make it a complete halt?? If cant afford buy car, buy bike or take public transport, y wanna force them to fall to debts trap??
Please include our warga emas. Retiree must be included as well. Every cent count after retire.
This move will only generate more problems to the current car market / financial problems, namely:
1. Will be abused by wrong parties using those names who are eligible by giving them some money as reward. In the end, somebody else gets to enjoy tax free new car while the youngsters will have to stick to used car.
2. Value of low and middle price-range used cars will drop more than they should be, as used car dealers will “Tekan” the trade in price using this scheme as an excuse (saying used car is normally for 1st time buyer and they will prefer to buy tax free new car if you want your price so high lah~~~blah blah blah….)
3. For those youngsters whose comfort budget should be within national car range will force themselves to go for higher price range non-national new car as they will think that this is MUST-GRAB opportunity,thus causing some of them to be caught in financial difficulties due to higher monthly repayment and cost of ownership such as maintenance and insurance etc
4. There are always reasons why some of them still don’t want to get a car (probably they are afraid of financial burden). But now the government launching this scheme is like promoting/hard-selling the cars to them and lure them into a long-running 7-9 years loan tie-up.
5. Tax free for these cars will mean loss of billions a year…. How many billions can our government afford to lose again?
6. Tax free scheme should really be implemented for a certain group of people like OKUs, single family or charity organizations etc
7. If ever want to go tax free, why not lower the tax for all the cars under rm100k/150k and make every lower-middle income group happy? Why only for specific person like 1st time buyer? Are they more special than the rest of those who have worked hard in their life and contribute to the nation’s development? Be fair please.
I should stop now as I would one whole night to express my thoughts and comments…
If the government insist of launching this scheme, please stick to national car models only with some stringent rules, regulations and monitoring
Dream on ..
zero excise duty and 20K of people lost their jobs this year.
Don’t buy new car until the price drop nearly 50%…. don’t give your money easily to those capitalist….
janji ada Vios, ada gaya
its all talk only. will not happen.
bye2 RV
After spending so much money trying to improve public transport this Gomen is proposing to do this? The roads will be clogged up and we’ll be back to square one.
Please, pay the ptptn loan first.
Absolutely ridiculous idea, whoever came up with this probably responsible for redesign of the road system around SS15 in subang jaya
Silly comment.
Any form of tax reduction is good for the economy especially the excise duty.
Please make it Youth First New Vehicle Scheme… So that it will slowly phase out all the old second-hand cars that they previously bought without much safety features
Yes, safety first.
Another first buyer scheme?
What? Are you going to charge car gain tax if they owners sell their car within 3 years of purchase?
Why not? Those jepunis cars with purportedly higher RV can pay higher gain taxes, while those P1 with purportedly lower RV no need pay gain taxes cuz alredi low mah!
Win-win for alls.
I think this whole idea is crap.
They are bound to be abused as, if not careful, first time car buyer would be taken advantage to register cars and resell it for a profit. This would further distort the second hand car sales price.
And is also a silly idea to encourage youngsters to take up debt on a car before owning a house.
Ya, should encourage public transport instead of putting more cars on the road.
Gomen should introduce a new scheme . Young graduate-buy -second hand only scheme . They should be discouraged buying brand new cars when they are just adjusting their footing in the dog-eat-dog-world . inflation , insurance , money to the parents , PTPN loans , …heck no money left to even change the spark plugs lol .
I never have a new car and I don’t need it. How about you?
Bring in tax free Electric vehicle instead lah…
or just lower the excise duty by half of what it is.
The report’s “UNNAMED” sources said that the Customs department will determine the list of cars that will benefit from the scheme.
The catchword here is ‘Unnamed’ meaning NO 1 will be accountable/responsible if there is any erroneous reporting in this article.
I’m not going to question the report but since when does Customs dept determine who/what/when can purchase cars ??!
our roads and hiway ..even those kg roads will be clogged like hell, especially during public holiday.
i think it’s a good idea, when these young people cannot afford to pay, the more financially stable ones can buy their car at a song.
when you do things selectively, abuse is bound to occur.
A better way is to reduce car taxes across the board for everybody.
That way, it is less prone for abuse.
Silly idea to feed some greedy mouths. An idea that will be abused just like APs. Trying to think how many CKD Mercedes are going to be registered under new first time owners. Is there a capital gain tax on selling?
If you want to help, you lower duties across the board.
Plenty of good used cars in the market. A first time buyer can start there.
Contradicting!
If like this,
Public parking rate hike for what?
Built LRT/MRT for what?
This obviously shows all they care is about the money and not the public.
They should encourage youngsters to use public transport instead of owning a car which may cause more burden than providing convenience if they are not financially stable.
Planning fail. I don’t know what the gomen want. Seriously messed up country
See how much government tax us. GST again. Income tax again. Road tax again. Yet our economic is terrible.
Instead of giving first time car buyer scheme, why not gov gives first time HOME buyer scheme instead?
It would be more practical beb.
We actually do have long time ago. Only not attractive enough and doesn’t really help much
Which scheme is it?
I know there’s one MyDeposit scheme before which provides you rm30k as downpayment but it has already expired on 30th June 2016.
Scheme like MyDeposit is better alot than this first car buyer scheme i guess?
I had a number of course mates whom really stretched their monthly budgets to get T.Vios and H.City shortly after landing their first jobs. All is fine except for the times to pay the r.tax+insurance, or when an unexpected repair bill pops up (not to mention other non-car ownership related matters, eg. spoiled handphone, family/partner needing some urgent amount of $$, or PTPTN blacklisting them from travelling abroad, just to name a few)
Nice. I can put my children name for an E class and a 5 series.
Yes , thinking to buy on behalf my wife name . Hope the guarantor loan not limited on this scheme .
I like this idea. Majority who take up this scheme will most likely not able to afford it anyway and by 1st or 2nd year will kena tarik. Then can get good lelong deals. I say go for it. Who cares national debt levels high. These uni graduates dont care and wont want to care anyway..
stupid idea. It will just kill p1. youngsters will choose Toyota or Honda for the sake of “maximize tax saving” haha
Yey!!! I have 2 sons just graduated and found their jobs. I have them buy 2 new cars for cheap cheap price. One car for them, one car for me to drive…..Terima kasih, Malaysia Govt…..
This is why a shadow government must be formed. Only then we can know whether the opposition has an idea of their own or not. We are here now bashing the current government proposal, but what we do not know is how good or bad the proposal can be from the opposition…..Well, come to think of it, the opposition will not want to form a shadow government in case their proposal is even worse than what the current government is tabling. It is easier to bash than to think and propose a workable method….sigh..
Perhaps this should be offered to a designated income group rather than age group.
That way people won’t be induced to spend more than they can afford.
Some of you here already have ideas how to abuse this scheme which would just lead to this scheme being misused by certain parties.
I am a pensioner. If i want this new car deal, i will have to find a young wife.
I think the price chart given is incorrect. Car excise duty started from 60% up to 105% (as per MAA site). So if excise duty exemption applied, the car price should be >60% cheaper than current price.
That is before localisation incentives.
Why don’t you reduce the public transport fees like mrt or lrt? What a stupid policy to encourage more cars on the road.
I am 26 years old, I would like to know the new myvi eligible for first timetime buyer scheme?