Car loan purchase bankrupt

As we all know, Malaysians love cars, but it isn’t always a happy tale, that love affair with the automobile. Bankruptcy as a result of the rush to have the latest and brightest metal isn’t as far-fetched as it sounds – according to a news report, one of four bankruptcy cases in the country is caused by the purchase of vehicles.

The Sun reports that between 2011 and 2015, 27.94%, or 28,374 cases, of bankruptcies recorded in the country were related to vehicle purchases. The publication obtained these statistics from a report by the Insolvency Department, which also revealed the other top reasons for bankruptcy.

Housing loans were next on the list, with 21,697 cases making for 21.36% of bankruptcy cases, followed by personal loans (20,727 cases, or 20.41%) and business loans (11,899 cases, or 11.71%). The department said it handled a total of 101,537 cases during the period from 2011 to 2015.

Statistically, the majority of the cases were from Selangor (29,421 cases), followed by the Federal Territory (14,479) and Johor Baru (14,064). Perlis had the lowest number of bankruptcy cases in the five-year period, with 343 cases recorded.

Age-wise, individuals between 35 and 44 years old made up 35.24% of all recorded cases during the period, while those between 25 and 34 years old made up 22.52% of the total. The report added that while there was an increase in cases from 2011 (19,167) to 2014 (22,351 cases), that number dropped in 2015, with 18,547 cases being recorded.

Do you think the obsession we have with new cars has resulted in many spending beyond their means when it comes to vehicle purchases? Share your thoughts with us below.