While some people have begun downplaying the severity of the coronavirus pandemic, for others, it’s a crushing reality check of what’s impermanent, like cars.
Chang Keng Keong, a manager at a used car dealer, told The Star that there has been a slight increase in the number of people wanting to sell their cars, especially after the dealership reopened once the MCO period ended in June. Some of the cars have only been used for less than two years.
When the loan moratorium period ended, Chang approximated a 30% increase of people wanting to sell their cars, but some changed their minds because they cannot afford the difference between the market value of their cars and the amount of loan left to service.
“For example, if the car still has RM50,000 worth of loan and its market value has fallen to RM40,000, the owner would have to fork out another RM10,000 to sell off the car and stop paying monthly instalments.”
“Of the number of car owners who reached out to us, we were only able to buy half of the cars offered. The rest of the car owners were unable to come up with enough money to pay off the bank loan,” Chang said.
Separately, another used car salesperson, Viktor Ooi said his outlet received a monthly average of 20 enquires over the past few months. “Some of them are those who recently lost their jobs in Singapore and are now working in Johor where the pay is comparatively lower. They could no longer afford to service their car loan,” he said, adding that were also those who wanted to trade in their cars (also less than two years old) for a cheaper one.
Second-hand car dealership operator Peter Soong said there were more people buying used cars between June and August, but the number has returned to normal. “Most people who come to my shop are those wanting to sell or trade in their cars,” he said.
Besides cars, vehicles such as vans were also being sold more frequently since the moratorium ended. Johor Motor Hire Purchase and Finance Companies Association president, Lum Chen Fook said many of these vans were previously used to ferry tourists before the MCO.
“Due to the effects of the pandemic on the tourism industry, some tour operators have decided to sell off the vehicles.” Lum also estimated a 30% increase in the number of people disposing of the vans. “We started to see an increase last month when tour operators felt that it would take a long time for the industry to go back to normal,” he said.
Meanwhile, sales of used cars in the past few months have skyrocketed, following the government’s announcement of Penjana, its short-term economic stimulus plan. The month of June saw year-on-year a jump of more than 100%, and the momentum carried over into July when sales went up by another 30% – a historic high.
Another factor for the uptick in used car sales comes directly from people who trade-in their older cars to buy new cars during this sales tax-free period. And then of course, you have those who are downgrading for reasons outlined above, as well as people who choose to buy new cars instead of using public transportation. You know, for hygiene reasons.
Proton and Perodua are both enjoying higher sales volume in the past few months, with the latter achieving an all-time high of 26,852 units sold in October. If you’re shopping around for a used/recon car, be sure to check out our comprehensive used car buying guide, which details the things to look out for before you ink that deal.
Looking to sell your car? Sell it with Carro.
This is sad.
Many fairly new Myvi owners are trading in their cars to my dealership until I spend whole days towing their cars to my yard.
I was surprised that many are very unsatisfied with their Myvis and other Perodua cars, many were also scared about sudden failures from the fuel pump so they quickly traded in to me.
Lucky I can always find suckers to take them off my hands fast. Haha. More business for me.
Shame on you john. Those poor car owners ekceli sold their cars to put food for their kids.
Kesian all these poor owners for getting cheated by Perodua salesmen. Maicome buy Proton instead, better worth for your money and cheaper to service with no major fuel pump problem.
Lol old news. There’s no more faulty fuel pump (not only Perodua but Honda, Toyota & Mitsubishi also affected) anymore from Denso Indonesia. Its more common to see Hyundai and Ford in used car dealership than Proton and Perodua combined.
Car value depreciated the most in first two years of ownership… 100K trade in value is 60k. Summore must top up HP loan to let go.. unless its Honda or Toyota. and Perodua high RV
Honda/Toyota/Perodua may have higher RV, but you paid higher as new also right? The mathematics and reality of it is that CAR is never and asset that can appreciate in value over time. So no matter when we sell, it may have quite good RV. But still the RV will NOT be able to cover the remaining loan. So…. I am not sure that bro sam123 you meant when u mentioned “unless its Honda or Toyota…”
Reality checked.
Too much hassle. Sambung bayar better
So, does used car price also down or dealer margin become bigger?
still want to buy x50 ka?..hows the resale value
Very bad I hear. None of them want to sell their cars for a long long time. All of them so happy to use. By then their car value is not much left.
That’s what happens if one takes a 7 or 9 year loan. Most of the first 2 years is just interest.
Let’s just say for the ease of calculation, a 100k car with 100% loan at 3% for 9 years, total interest is 27k.
If you had only paid 2 years of your loan at 1176/mth (127000/ 108 mths), totalling 28K, you still owe the bank 99k, but your car is only worth 80k on the trade in market for a 2 year old 100k car, if you are lucky (10% per annum depreciation over first 5 years).
So you still need to top up 20k.
Again this is just an over simplified calculation but easy guide that most people will understand.
I am never one that will take a car loan over 5 years. In fact, I just keep buying used cars for cash.
Tough times indeed.
People often think they can afford a particular vehicle but in reality can only afford something from the segment below.
manalah, ppl jual their rubbish mercedes benz for the excellent proton x50
It wont be long before banks start to reposses cars and then when there are too many cars in its stockyard, they became lenient.
car sales increase and so people are selling their old cars for new cars. people still got money even though hit by covid19.
I am looking for Camry 2.0 year 2010