Over the past few days, we’ve seen a rather misleading letter on MalaysiaKini being widely shared on social media, which lays claim that no individual car loans can be processed by local banks due to so-called “GST paperwork.”
The author said that two banks had declined her car loan application, because she wanted to purchase a car from a direct owner. Apparently, the banks would only process loans for those buying from second-hand or new car dealers, citing that there’s “too much work involved due to the Goods and Services Tax (GST).”
Is there any truth in this? Thankfully, absolutely not.
Sources within the industry have confirmed to paultan.org that the recent implementation of GST has not affected car loan applications in the way described above. Hire purchase applications are being processed as before, be it for those buying from individual owners or car dealers.
Let’s not forget that GST will not be imposed on the sale of a used car from one individual to another. Car loan interest is fully-exempted from GST too, so claims of such “GST paperwork” is clearly unfounded. However, when you buy a vehicle from a used car dealer, the dealer has to pay the government 6% GST, but only on the margin made (not the full amount).
In fact, we at paultan.org have personally had two recent post-GST experiences in the past month regarding the matter: once as a buyer, and the other as a seller.
In both cases – involving a direct owner selling to a direct buyer – we did not encounter such an issue. The car loans were approved in due time, as per normal procedure.
Looking to sell your car? Sell it with Carro.
Those who buys a used kimchi can get loan.
No issues
In fact buying kimchi cars no need get loan. 2013 Cerato sold for RM40k, why need loan?
The author may be wrong, but MalaysiaKini is still good stuff, im tired of listening to govt trash.
From what I know, if the car being sold have loans still needs to be paid, then the loan to purchase that car by another person will be very difficult.
The owner have to settle the loan fully first before a new loan can be applied by the buyer.
Thats related to bank Negara not allowing interbank settlement which was implemented way before gst
Wrong is wrong.. MK is bullshit
Typical msiakena article that meant to flame anger and hatred towards the government. 100% opposition aka foreign controlled media. No responsibility whatsoever.
We got rejected by Public Bank when wanted to purchase directly from the owner. The manager said only from dealer, but didnt mention if it was due to GST.
U r right..n due to this fact my friend “lost” his car while the car is under the custody of a car dealer while waiting for a buyer to buy his vios
That could be a Public Bank policy but not GST related. Try other banks. The two banks that we mentioned above in the story are Maybank and Hong Leong Bank.
Public Bank is not the only financing company out there. Tell them to go fly kite and try others.
Bravo paultan.org for clarification
Agreed with john.in my case,not only public bank.but ive tried few other banks including rhb (same bank as the owner).all got rejected.all said need to go thru dealer without reason. Mbb said can only apply financing from the same bank. rhb mentioned dat they dont settle on used car aged 7 years above.4 to 5 years still maybe.
Anyone can clarify dis?
Doesn’t make sense.
Financing from same bank issue could be because the existing owner does not want to do settlement of his loan. That’s a different issue – Bank Negara stopped allowing inter-bank hire purchase settlement. This means to do a transfer, the existing financing must be fully settled.
When I sold my Nissan Almera, I paid off my loan first which was under Tan Chong Capital. Then sold it to a direct owner who took a Maybank loan. No issues. This happened around 3 weeks ago.
Two weeks ago, I bought another used car (year manufacture 2008) from a direct seller. Used Hong Leong bank. No issues.
Aman’s comment is quite true also..If the current owner’s loan isn’t fully settled, the only way the new owner can get financing is through a dealer who is on the bank’s list. I went through the same process recently but thankfully the previous owner’s loan was fully settled (for a 3 yr old car mind you). So I didnt need to go through a dealer. Of all the banks I applied to only Ambank said they allow to settle the loan directly with the owner, and not through a dealer.
So this rule will only actually profit the used car dealers, what with their sky-high dealer fees and what nots. And for those who cannot settle their loans early, they have no choice but to let go of their cars to the dealers with a much lower price than if they sold their cars themselves.
As until 2014, only public bank will accept direct owner to buyer case.. but since last year, they also have stop the service.
So currently as far as i concern there are no more bank offerings loan for direct owner cases…
BUT it nothing to do with GST. (Of course im also hate gst as well.. haha)
The only way is if u want to buy a car from direct owner, find a used car dealer who can handle everything becoz bank need INVOICE from registered dealer to dispurse the money… usually they will charge u around rm500 till 1.5k. Depends on dealer…
They will arrange everything..
Y need these middle men’s to make money at as Angin. Willing buyer willing seller, how come profits the car dealer. Weird
As far as i concern, they need the registered dealer because of the invoice.. they need an invoice that is from a registered company.. and the dealer also have to meet the requirements for banks…
Becoz bank can easily dispursed the money…
Even im also dont like this, but there are reasons i think… based on my experience 6 years as car salesman, this issue just started last year.. before this public bank the only offers direct owner case.. which a lot easier.. hurm…
But i totally not agree with the charges, becoz each loan they submitted, dealer will get a commision from bank called handling fees..
There are still plenty used car dealer offers no charges… so be smart.. dont easily pay.. u must know ur rights.. ;)
I agreed with MalaysiaKini. Due to GST ISSUE, If u purchase used car directly from owner with no bank loan, then it is ok. BUT IF U NEED Hire purchase loan, the owner needs to sell the car to used car dealer in order for u to be eligible to get HP LOAN. This happened in end of June 2015 when I tried to purchase a second hand Vios directly from owner. Maybe Paul Tan is famous so any deal he gets is “GST” exempted (joke)
The buyer of my Nissan Almera had no issues getting a loan from Maybank. The buyer used a Melaka branch. They couriered the transfer documents. to Old Klang Road Taman Desa branch for me to sign. This was just three weeks or so ago.
How abt gst charge on a recon car? Cant find much material on tis over the internet. Is it ovr the full price of the car or margin tax is applied on d profit? Appreciate some clarity. Thanks
if the car is sold for the first time in Malaysia (not registered with JPJ yet), it will be taxed on full price. if it is already registered with JPJ before this, then only it will be taxed on margin
Paultan tipu! Mkini is the gospel of truth according to dear leader!
All stories in the site is true! Becoz its saying the Gov is bad!
If you disagree, means you are BN trooper paid by najib!
All your counter-claims above are fake stories, just like fake tampered emails!
We should ask banks and Bank Negara to make official statement on the issue. Ask a few experts as well for independent views.
If this is the current way things work, I guess oto.my can start offering the service for sellers and earn more money atas angin. :P
i dont we should dismiss the case as ‘false’…i have few customers who buy n sell second hand cars and i heard of this a mnth ago actually….
there is a case for it…
Just a simple evident of their reputation…. just rumour 100%
I’ve tried another 2 banks (Affin and RHB), apparently the vehicle that I wanted to buy is too old. Y2004, Land Cruiser, so, their policy does not allow financing of old cars. :(
Public Bank didn’t even ask the age, the moment they heard it’s from direct owner – advised me to arrange a car dealer to handle it :(
Banks generally don’t give hire purchase loan for cars above 10 years old, that’s been the case for a long time.
If u need to take a loan, it’ll have to be personal loan.
Its all about risk appetite for the banks. Older cars are too risky cos if they reposes the car, its harder to sell. Also, Bank personnel seems to not want to do paper work these days. Even inter branch process they say cannot be done until I spoke to the manager. Perhaps the issues lies with the personnel not willing to fill in more forms and not a bank issue.
Nothing to do with GST.
I believe that might be true. It can’t possibly be a bankwide policy – no banks would be foolish enough to decline easy profit. Probably just some branches were not willing to approve it due to some reason (loan amount/profit too low compared to the paperwork needed to be done), or they were just being polite to decline the financing application due to other reasons (weak credit-worthiness, old car age, etc) but didn’t want to mention it. But as a customer, I believe you have a right to ask why the financing application was rejected, and the Bank must reply.
I just sold my car 1 mth back to a direct buyer and I am a direct seller. No going thru 2nd hand dealers. I still owe bank 100k and I am not willing to make full settlement. So I just ask the buyer to take loan from Bank and they do internal transfer. Done in a week. And it’s public.guys please find out more first before bombarding
I have ask Maybank to do internal transfer. They told me that they dont do any internal transfer now. Direct seller need to full settle the current loan as in Maybank too, and me as a buyer apply a new loan. I ask Public Bank, they told me the same thing. Both of them call me to go through car dealer to handle it.
my loan was with seksyen 14 hp centre pbb and the buyer took the loan from wakaf siku pbb. No problem to do internal transfer eventhough diff branch. They even cover the courier cost for the agreement. Maybe you might wanna check with these branches.
week ago, i had purchased 1 unit company showroom/company car which alrdy register with plate number since 2013,
how come they still charge me extra GST 6% from selling nett price? not from profit margin??
I would like more clarification on this as well.
Is it true that GST is only charged on profit margin only?
If a new pre-reg car is being sold, where got profit? so where got Tax? There is no value added, how to charge GST?
This is where it gets really messy.
If A dealer insist on charging GST on the full amount, should I make a complaint to Kastam?
Typically for pre reg there is still an accounting profit to be made. Because of how depreciation works, the book value of a pre reg car typically dips below the price they will sell it for. That becomes the margin.
Gst On full amount is wrong.
week ago i just purcased 1 usedcar from a car showroom HQ which either its was company or demo car..
but it had alrdy registerd with plate number since 2013,
how come they still charge me GST from selling price, but not the margin profit?
exp: RM100k+6%= RM6k extra.
My sister in law just bought a late 2014 Iriz from a direct owner earlier this month, and we did not encounter any issue with the loan process at all. Everything was done within 2 weeks upon submission.
One thing i notice however, the interest rate was not that favourable, unlike what few dealers were quoting, but that’s another story altogether.
pls clarify which bank.
may i know which bank? how about the market value? as i try to get from pbe.. they can offer for mitsubishi mirage is rm 28k but outside dealer they can get 42k.