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You sure you can get your car loan approved?

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Sales tax for new cars is now exempted fully (for CKD models) from now till end of the year. So, perhaps this is a great time to get that new car we have been eyeing for a long time. The savings from the sales tax is enough for a cuti-cuti Malaysia or a cuti-cuti at South Korea depending on the car model which you will buy. Anyhow, it’s a savings and that’s a good thing even if we do not use the money saved to go for a holiday yeah.

However, there’s this little problem unless you will be paying for the car with cash. If you intend to get a car loan instead, then here’s some potential bad news. Banks are stricter when it comes to car loan approval because they are worried that you may still lose your job even if you have a job today. It’s like those days when banks have stricter requirements for people working in the oil and gas sector…

Article in themalaysianreserve.com Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said lenders are stricter and this means longer approval times. She said, “The banks are looking at many angles, such as whether the applicant is working from home or is the industry thriving, because they are concerned about the person’s ability to pay. Previously, the assessment normally takes three to five days, but now it could be a week or longer.”

She also shared that it’s now difficult to get a 9-year loan and customers could only secure a seven-year loan and a maximum of 90% financing. All these depend on their creditworthiness. She said that beyond just becoming stricter, banks have also reduced hire purchase loan quantum, particularly for used vehicles, and it varies based on brands. Do read the article in full. A lot more details. Article in themalaysianreserve.com

I think we should not be too worried. If we really have saved enough for that new car, surely our financial foundation is strong enough to get the car loan approved. Perhaps we just need to watch the price of the car we buy. If we use 9-year loan as calculation, we may be able to afford a more expensive car. if we use a 7-year loan as calculation, I think the chances of us getting the loan approved is much higher. Of course this meant buying a cheaper car which may not allow us to show off that much. Well, if we are not happy about it, then do not buy yeah. No one is forcing us. Happy driving your current car if it still works well.

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Next suggested article: Car bookings tripled. So many need a car?

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