Bank Negara Malaysia (BNM) has squashed rumours of a memo directed at banks to reduce the maximum repayment period for new car loans to seven years, and raise the minimum down payment value from 10% to 20%, reports Business Times.
“We have not given any directive to any banks. The current financing terms and conditions of a maximum financing period of not more than nine years under the Responsible Lending Guidelines remains unchanged,” a spokesperson told the Business Times.
Rumours of banks having been issued a memo to cut the financing period and increase down payment for new vehicles by September have recently been doing the rounds on social media, causing quite a stir.
BNM’s Responsible Lending Guidelines, which were implemented at the beginning of 2012, have recently been joined by an additional set of measures that include a maximum 10-year tenure for personal loans.
At 83%, Malaysia’s household debt-to-GDP ratio is the highest in Asia amongst developing countries, says the central bank. Over the southern border, the Monetary Authority of Singapore (MAS) recently capped the maximum loan at 50% (for cars with an open market value of more than S$20,000) and the maximum loan tenure at five years.
Aiseh it will be good if it was not a rumour.
Agreed. Sorry to say that Malaysian really need someone to lessen their individual debts.
Bank Negara is useless. Out household debt is the highest in Asia. It has gone critical. GDP per capita is still one of the lowest in the world. Our earning capacity is so low and the ringgit is practically worthless globally.
Worse still our national debt is over RM$600 billion.
This what happens when you have dunggus running Bank Negara and instead of coming out with protective consumer policies, they sit in Sasana Café having breakfast for hours and lunch for hours.
Been to Sasana. Not many people there, even after office hour. Nobody loitering there, they all busy.
During my college days in Australia, my lecturer gave impression that BNM is one of the best central bank in the world, then.
Highest household debt is not BNM fault.. it’s individual fault. Salary RM2K per month but spending like hell as much as income like RM10K per month..
As usual, the Malaysia’s ‘New Generation’ will blame the gov for everything. I bet if they accidentally step on dog poo, the gov is the first to be blamed…
Factory worker gets stuck in a jam in his turbo kancil junk. A CEO heading to the airport to attending an important meeting also gets stuck in the same jam…..
Well its BN fault, not Bank Negara but Barisan Nasional. Those are the monkeys that controlling Bank Negara and keep asking BNM to print ringgit. Besides, our dunguns leader keep using our money for all sorts of unnecessary construction.
Gua rasa salah sendiri la.. sapa suh malas, sapa suh hutang byk2.. live within your means la.. blame BNM pula.. puiii!
without unnecessary construction we don’t see so many billionaire in malaysia..and the list goes on..hey singapork also use all pencen money rate at 110% to boost economy
Condemning bank negara for own debt? why dont blame god for letting u born in this world? what ever government policies is, it their business.. no matter how much u hate government, yr dept is yr problem.. not bank fault, not government fault not even god fault.. ur salary is at 2k per month, just spend it wisely no matter how hard life is.. my salary is 2.5k.. i got my own proton saga, rent a room with friend, own a house but rent it, ptptn dept, and i live in klang valley which we know have high living cost.. so stop blaming government eventhough me also didnt like the government, but put the blame on urself if u own a large debt.
Won’t affect me even if it’s true. I never want the bank to earn too much from me, so I always downpayment 50% – 75% and loan 2 years for my cars. MWAHAHAHAHAHAHAHAHHAHAHAHA !!!!!!!
it’s like a dream can buy car by cash..but when u can buy car by cash.. u don’t buy them instead apply loan to buy a helicopter..that is how malaysian people when spending..
why buy cash when current hire purchase interest rate is quite low…better pay min dp and stretch the loan period.
use available cash to offset much more exp loan like housing loan, even better invest the money and gain!
buy car with cash is damn olskoll thinking..leverage the loan is the way forward
housing loan are better than car loan..please check back you claim…and be surprise..
cash your car…and using loan for house…
ya already check…effective rate for car loan still low…so y bother cash. better use it invest in fixed trust or pnb trust
already expected it was not true. Impossible for banks to change the loan requirements…cars manufacturers and AP holders will be the first to hantam bank negara especially proton. Seriously affecting car sales…
It is a good awareness to us to see fellow malaysians are goons…easily believing any info given.hahaha
IMO. It is sad it is only rumors. This kind of law should be imposed years back to minimize young drivers purchasing on cars…from here also we got to know our household debt is sky high. Something to ponder deeply.
Proton must be very happy now…LEGA RASANYA…. :D
I was hoping it is not a rumour. Just before Raya, so many people buy luxury cars to show off when the balik kampong. It is no secret that just after Raya, a high peak number of cars are tarik balik because loans cannot be paid.
This is an abuse of the loan process. Just to show off to the Datuk and Nenek in the kampong that the kampong boy has made it big in the Bandar, so many who do not properly qualify for loans get infact 100% loan. We all know 100% loan is possible in Malaysia if you have cables to pull with the banks. Bank Negara, please live in the real world. What your banks are doing behind your back is two different things. Getting 100% car loan is so easy in Malaysia because all the car companies are big crooks working hand in hand with the bank staff and the bank staff are getting kickbacks.
Why cant they just rent the car?
As we expected from “Better Nation” aka “Barang Naik” aka “Barisan Nasional”. Sekian Terima Kasih.
baseless comment
I saw the Suprima S the other day. The SA told me this thing coming. Hong Leong bank already wants 20% DP.
So it may come, just not sure when
It would have been good if the rumour was true.
It is pure madness to service a car loan for 9 years. Even 7 years is 2 years too long.
At least it has 2 major benefits.
1) to encourage better financial prudence
2) to put pressure for the government and car makers to reduce price (or tax in the government’s case).
In fact, these sort of 9 year loans are detrimental to proton as people with 9 year loans will be very risk adverse in buying a marque that is less proven in reliability. They don’t take chances with “lemons” as they can ill afford to digest the depreciation if they have to rid themselves of a lemon. Which shows. Even with horrid specifications, Honda and Toyota still sells in the boat load. As much as I dislike being ripped off, they are some of the cars with proven track record of reliability, more so Toyota than Honda (which alarmingly has been churning out a good number of lemons lately)
Nothing personal on you bro..
But as a discussion, don’t you think the less well off people will stretch their loans period for cheaper cars to save every penny they have? Hence the 9 years period is welcomed?
Sigh! I too hope it was true. Now everything is instant gratification and live the moment. The time is here and now. Enjoy while you can. Imagine what would happen if this is true. Sales would be very slow. Car companies have no choice but to reduce price or add values to really attract customers. Remember the EPF withdrawal for computer fiasco. Instead of buying computer, the money was diverted to paying the car downpayment.
maybe there will be a “automotive bubble burst” before any “property burst”…
Yeahh… Reduce the loan tenure up until 7 years max … No money so just use public transport lah …
or buy a used car. this way, used car will have some strong values due to higher demand.
It would best benefit the people if the excise duty is reduced to 30%, abolish the import duty & hence the loan tenure can be set maximum of 5 years with 80% bank financing.
excise duty reduced to 30%, no money for BR1M already. The Rakyat will suffer because no BR1M. BR1M is such good thing to come out from this administration. Use own money to help own self.
I like your sarcasm… it’s refreshing.
kte kena amik loan longer period sbb harga kereta da semakin merepek compared to our salary per month…negara len can do 50% loan or lesser than that sbb salary-to-car price ratio quite low, for example (assuming all are equal)
US income per capita = av USD50k
car price (example: elantra) = USD20k max
Malaysia income per capita = av.RM18k
car price (same example elantra) = RM85k min
car price (another example proton saga flx) RM 34k min
…..so go figure on why we need to take such high loan period just to own a car
Dude, agree to the points you pointed, those good old days of Malaysia are in the 1970s to 1980s before our Almighty Proton was born.
My dad had told me he earning rm 1k and a brand new Toyota Corolla cost rm 12k.
After hearing what he had said, my heart turned sour, bloody Hell now I earn pittance also can’t afford a rm 110k Toyota Corolla aka Altis !!!!!!
Count the clock. I believe if dr.m goes visit god. We’ll have better day. This old fart is just too annoying. He control everything.
Funny is the old fart goes for the suprima s launching. Very proud of his cronies.
yet, someone still blaming rakyat for poor house-debt management..
really? so country like, Somalia have what, 107 years car loan? compared to the world we are above average…not no 1 or top ten but better than most…
if harga kereta merepek, buy used car la..
Expected reaction from you guys.
If it is true you still hantam them.
if this is true, who is going to stimulate the economy?
We must keep spending to stimulate the economy by purchasing.
If you are not able to service the loan, Bank Negara will not help you.
income from car taxes are not that much.
total revenue for 2012 was in the region of rm190,000,000,000 (read billion)
petronas contribution is 30 bil while IRB is 125 bil.
http://www.tax-news.com/news/Malaysia_Exceeds_Increased_2012_Tax_Revenue_Target____58997.html
while revenue generated by excise and sales tax are not that many, at 20 billion ringgit. or 10% of total revenue.
http://www.bloomberg.com/news/2011-10-07/malaysia-s-2011-2012-budget-revenue-expenditure-table-.html
more details
http://penangmonthly.com/statistics-november-2012/
I agree with you alldisc. Yes the revenue from car taxes may be lower than what petronas and all others contribute, but please bear in mind the car taxes paid by rakyat is not a one off cash payment but payment done by taking up loans incurred into the buying price of the said car.As with loans,you have interest,charges etc etc.In accounting,car depreciates 20%/year,thus rendering the car worthless in 5years.House loans,if it is true appreciation (hopefully not a property bubble), will create value and wealth while cars are just junk at the end of 5 years.Thats why car manufacturer will create new vehicle every 5 years to keep consumer interests and buying.
Deng…it is a good move. I hope it’s not a rumour. Most malaysians don’t know how to think…simply buy expensive cars when they can’t afford it. We will be sinking like Greece if the Goverment don’t do something. I will say 6 years maximum loan. Otherwise, don’t buy car if cannot afforid! Better invest in properties!
Rather than kelam-kabut quashing this ‘rumour’ ASAP, BNM better take some time and revise the so-called Responsible Financing Guidelines la..
Or if that too big an asking, simply rename it to something much apt to its effect/implication to the nation / public debt level.
Anyway, people at BNM that matters, should be ashamed with themselves to actually officially denying this ‘positive’ rumour. BNM should be implementing this measure instead.
Can BNM publish these stats? Surely there department in BNM that have these information at their finger tips and thus could handled this request in a blitz.
Percentage of loan under these criteria.
It could be presented in a matrix table.
1. Loan tenure (5,6,7,8,9 years)
2. Financing margin (50%, 60%, 70%, 80%, 90%)
And cross-reference with the value of the loan.
e.g.
A. Below RM50,000
B. Up to RM75,000
C. Up to RM100,000
D. Up to RM150,000
E. Up to RM2000,000
F. More than RM200,000
And publish yearly data since, let say, 2008 until to-date. We should see some pattern on Malaysians lending.. opps sorry, borrowing habit. ;)
If BNM have the guts to publish, we might be able to see evidence on purchase of low to medium price car was and is heavily supported by the longest tenure and highest financing margin possible. And its not impossible that high value car purchase was also sama saja..
Which means that BNM will never make this information public.
Note:
Officially, there are no 100% financing margin since for every car loan 10% down payment is required, but we all know the truth..
Aiya why its not true, I prefer it true coz lot of cars flooded the road already…tighten the loans can help stop the flood and accidents will reduce them.
i also hope it would be true..it will automatically reduce the rakyat burden,forced the manufacturer to reduce price in order to ensuure their product is competitive, reduce the heavy traffic jam nowadays, make rakyat think twice on purchasing new cars (some people i know love to change their cars 3-4 years in order to show off that they are wealthy).
current situation : Bank is making profit(from interest rate ..9 years loan?..pheww..HUGE profit), Car dealers are making profit (HUGE), car manufacturer is making profit(HUGE)..and consumer?..rakyat?..the car value DROP instantly after it got the registration number.. and yet we still serve the loan for 9 years..
and mind you that the loan that you paid to the bank is not the price of the car..OFFICIAL Price is waht the dealers told you..but the ACTUAL price you paid is : Offical Price + INTEREST for 9 years = Actual price…and its A LOT!!!
But sadly ur car value DROP instanly after it got the registration number…imagine after 6-7-9 years?..
For now, since i already finish up my car loan (6 years) i will used it until reput..i wont easily give my money to the greedy BANK and the car dealers.
they will talk about technology, fuel saving, safety etc etc just to make sure their product laku..but..for me..enough is enough.
I agree with you. I have a Vios bought 2009. Loan 7 years. Pay 1k every month. Until now (after 4 years service loan) I still owe bank RM40k. Suck Blood Till Dry.
who ask you so stupid sign 7 year car loan?!
actually who ask u to buy such a overpriced vios..damn stupid
i must agree with tdcu and dogongs, why did u make a 7 year car loan if you can’t afford it? I mean, you do have the option of taking the 5 year loan. Didn’t u?
Yes it good if loan is capped for 7 years and 20% DP. However, at the same time Govt must reduced car taxes so that people will not burden with higher monthly repayment. Industry also will not suffered. This will help reduced debt (higher credit ratings for Malaysia) and people will have smaller loans and faster repayment period although monthly payment amount is still the same (due to shorter loan period). On the other hand, 20% DP is required to make sure only those who can afford to buy car can only do that.
have to do this steps by steps.
if not, Rakyat will be burdened with 20% downpayment.
I believe, bank is only allowing 20% downpayment approval on Proton, as proton buyer, mostly are too ambitious to drive big car, materialistic.
U can just go do some survey in the market.
what is good:
1. Reduce car price 20% to 30%.
2. Impose 20% downpayment, cap at 7 car years loan.
3. altough car price drop, but car affordability maintain.
if 20% downpayment, and 7 year car loan::::
RM80k downpayment RM8k/10%, 3.5% interest. 9 years repayment
= RM876.67/month
if NEW SCHEME:
RM80k downpayment: RM16k/20% 3.5% interest. 7 years repayment
= RM948.57/month.
This is obvious::
– More burden to get 20% downpayment!
– More monthly repayment! = more burden
– it’s about 8% more monthly burden just to pay the car loan.
If, to impose 20% downpayment and capped at 7 years max loan.
Gov should fullfilled the Janji 20% – 30% first.
and immediately launch this 20% – 7 years scheme.
then possible to allow 2nd hand car market under control.
haha,everyonne say hope the rumuor is true..tighten to hp loan?then a lot of car company gulung tikar ,especially the second hand car dealer…international luxury car bad biz,then no FDI…then who is losing..
if our car has no exise duty,then i can say tighten the hp loan is good move..but in reality,it is not..
I think first to gulung tikar will be P1 followed by P2. You think government will allow that? Never a chance.
From the begining,it is gov incompetent which result all this kind of shit happen,which now gov is still incompetent to make the thing go to the right direction..so sad,really..
car loan should not be more than 5 years full stop!
YES! Agree.
why, so me your mathematical model to prove this.
Otherwise its hot air.
I hope this info that i get is usefull
– Following bank negara is 9 years loan maximum and 10% minimun downpayment.
– Some banks already doing maximum 7 years loan and 20% downpayment minimum. but not all banks doing the same thing. Its up to the bank to give how much and how long the maximum loan. This may change in near future.
I submitted few loans for my customers this morning and ask them for this. Please correct me if I’m wrong.
BNM should have done it long, long time ago.
Instead, it chose to bow down to political will.
Malaysian does not need more loan.
We already have a lifetime long housing loan to pay off, no need for another blood-sucking car loan.
Most of the car loan instalment is higher than housing loan instalment, it significantly reduces Malaysian disposal income and purchasing power, we are forever slave to bank.
By the time you are retired, you are forced to use EPF life saving money to pay remaining housing loan.
It’s really tragic for Malaysian to buy most expensive car in the world.
The most ridiculous is Malaysian borrow money from bank to pay excise duty imposed by Government!
BNM new memo
Please stop entertain your loan…
All free…
no more loan application…just send ur application to PR…please indicate your name and ic n say i love brother Anwar abang guan eng papa karpal…ACT NOW!!!”
Car loan free…
house loan free
study loan free…
Personal loan free
The new ……manifesto….Free 4LIFE
In my perspective as a gen-y, it’s a good positive move and should be implemented way long ago to reduce the rate of people in deep debt and brankruptcy just because of something that will rot in value as soon as the person owns it.
You see, a lot of car delears out there are offering 100% loan (probably gangin’ up with banks), which is of course very attractive offer among us young ones cuz zero down payment and cheaper monthly installments even though there is actually that huge interest percentage due to fully loan also long tenure.
Now I don’t know about you guys, but what shocked me most, is the fact that the average youngters doesn’t even know what ”interest” in their loan actually means! Ok, maybe a few, but majority doesn’t care about it even though they knew and just signed up! They kept sort of having those ”ala, berapa percent saja maa bunga tu and apalah sangat 9-10 years loan tu” mentality.
It ceased me everytime of asking/talking about this loan matter when a relative or a friend shows up and questioning what do I think about their brand new purchased (loaned, technically) ride cuz usually it always be the same case between them all. Its a sad thing and I could just hope they won’t gone broke.
As for me, even though the romoured regulations being end up to be implemented in the near future, I’ll still resist in taking a car loan. I would rather be seen rolling down the streets in my father’s 93 Saga (apparently still fit and in good running condition) instead of having sleepless night at the end of every month thinking about settling debt. I’ll definately get myself a brand new ride, but only if I could afford it cash or atleast with 70% down payment.
I would do the same, but now my old junk is costing me about RM 1000 a month to maintain. I have no choice but to buy a new car. Its European, that’s why its so expensive.
I really think property or investments is more important. But life gets very difficult without transport.
All the long tenure loan is the BN wrong doing. Artificial create affordability for high priced cars. It will generate juicy revenue for the gov and the ppl will bear the debts.
It is so obvious but many had fallen to the traps. And the same for credit card debts. Service minimun payment.
You can choose to take 1,2,3,4,5,6,7,8 or 9 years loan. Even can paid cash for it. The choice is yours.If you dont like 9 years than go take 1 year loan. Nobody force you to take maximum loan.
salary low but new car price super duper high even the basic model, not all the 9 years loan holder bought expensive cars to show off as there are many of them have to stretch the loan period just to buy viva or saga…
gaji kecik kereta mahal public transport tak efisyen
why don’t buy 2nd hand car? please stop all the car production if u feel msian people only entitle to purchase 2nd hand cars…new cars only for rich people and ministers
It’s is funny to see so many holier than thou people here blaming BNM for allowing 9 years loan. But that’s only half the prob. Nobody force you to take 9 years loan!!!!
The root cost of the problem is lack of awareness!! Nobody tells nobody what is the loan amount vs income ratio. Whose fault is this? I don’t knw. Parents perhaps, govt or oneself???
Now for those that says how great are they by driving donkey years old cars even though they can afford new one blah blah blah. They are obnoxious. Just because you don’t value Good car doesnt mean other shd not. My take is always this. If ones can put aside 20% of net income as saving every month then go buy that car that u want. I rather have sufficient saving and drive a new safer car than millions in the bank with an old unsafe car.
The right period for car loans should be 7 years, as cars depreciate in value. Shorter than that is much better.
I have a dream, when Bank Negara collaborate with the Government to reduce car taxes and at the same time reduce the loan period to 7 years. And when the taxes are fully abolished, the maximum loan period should be reduced further to 5 years. Fuel subsidy gradually reduced, encouraging use of hybrid & energy-efficient vehicles.
With that kind of solution, Rakyat will be happy with lower car prices (and does no longer need cash handouts & subsidies from the Government – can save for next year’s Bajet), Bank Negara able to achieve target of debt-to-GDP ratio, national car industry survived (and even thrived) with people able to buy new cars after 5 years and second-hand cars exported to Third World countries.
aiyo u all nih.. these rumours were spread by Honda/Toyota/Nissan SA la.. so that people will buy car faster before end of this year.. STOCK CLEARANCE maaa
pakai skateboard pergi keja oi…haha
reduce car prices at least 20% n then implement 20% dp, 7yrs loan, current interest. Gua ok saja.
honestly, me myself a bit stuck with DEBT..really2 my mistake.
I hope gov will implement 25%-30% downpayment to buy car. and max 7 years loan tenure seems ok to me. but do it gradually.