Who would buy used car car if ONLY the new car have sales tax exemptions? Do you agree? So many friends have shown the photo of their new car last year and this car. I could only envy them as I am still driving my Persona 1.6 MANUAL which will is now in 11th year. By the way, the power window is ORIGINAL yeah in case you are wondering. Haha. So, if the tax exemption is only for new car sales, only the new car sales should go up, right?
Actually, not entirely true because most friends I know owns a car or two. In other words, if they are to take advantage of the new car sales tax exemption, they would have to sell their current cars and because of this, the number of second-hand car sales would also increase and if they increase, what would happen to the price? It gets competitive and the buyers of second-hand cars also benefit from this too. That’s why second-hand car sales will be breaking the record which has been around for the last 2 decades soon.
Article in themalaysianreserve.com Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor Chong Boon said there was a surge in demand for used cars in the third quarter of 2020. He said, “Looking at latest sales performances, we are expecting sales figures for March 2021 to be the highest since 2002 or 20 years ago. Year-to-year comparison, the total sales figures for used cars will pass the 400,000 marks.”
Khor said the moratorium on car loans and other incentives announced by the government under the short-term National Economic Recovery Plan, also known as Penjana, have helped sustain used cars businesses. He added, “While Covid-19 may have ‘distorted’ our used cars market, it has also shifted how used cars at auction are viewed and used. We are witnessing good responses, good speed in adapting to digital retailing, and sheer determination and hard work from used car dealers.” Do read the full article here. Article in themalaysianreserve.com
Car sales always a positive sign
If someone could make the decision to buy a car, it shows that the person feels confident about his future. He believes that his salary will continue and he does not expect to be retrenched anytime soon. This also brings us back to an important point which I mentioned in an earlier article before.
Instead of focusing too much on the unemployment numbers which went up to 5.5 percent but has since dropped to 4.8 percent, we must focus on the employment numbers because these employed Malaysians are the ones driving the economy through their consumption.
Car sales is not just the price we pay to the car company
When we buy a car, we are helping the car salesmen to earn a living. We are sustaining the car manufacturer who will continue to employ people. These people would then spend their salary on other goods and services. This is what we meant by multiplier effect. We have yet to include pumping petrol for the next 9 years (at least)… servicing the cars as well as bringing the whole family for holidays. (within Selangor of course, for now).
So, if one is capable and could pay for the car, please do go ahead and buy a car and enjoy the smell of a new car or buy a good second-hand car and enjoy the convenience of loading it with lots of souvenirs during a holiday trip. Happy buying.
Next suggested article: An update of the Malaysian property market. Just charts for reference