{"id":17538,"date":"2021-05-04T20:00:00","date_gmt":"2021-05-04T12:00:00","guid":{"rendered":"https:\/\/www.comparehero.my\/blog\/uncategorized\/what-to-consider-when-buying-car-in-malaysia.html"},"modified":"2026-03-26T16:01:51","modified_gmt":"2026-03-26T08:01:51","slug":"what-to-consider-when-buying-car-in-malaysia","status":"publish","type":"post","link":"https:\/\/www.comparehero.my\/blog\/transport\/what-to-consider-when-buying-car-in-malaysia.html","title":{"rendered":"#NewNormal: Top 3 Factors To Consider Before Buying A Car In Malaysia"},"content":{"rendered":"\n

Are you planning to purchase a new or used car for yourself? What to expect before you can actually make your final decision to buy one? This article explains three main factors that you should consider or look for when buying a car.<\/strong><\/p>\n

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At some point in life, most people will go through the process of buying a car, and it can be super stressful without proper planning and good advice.<\/p>\n

To help you out, we sorted some of the most important factors and tips to consider before buying a car. Though there are many lists out there to guide everyone in their car searching journey, we\u2019ll focus on the top three in this list.<\/p>\n

1. Figuring out the financing – some things to know about getting a car loan<\/h2>\n

Purchasing a car is a big investment – only second to property – so it only makes sense for this item to be on top of your to-do list. Before figuring out what type of vehicle to purchase, you must first think about how you are going to pay it off.<\/p>\n

Knowing your credit score<\/a> will be super helpful. Having a good credit score will offer you higher chances of negotiating lower interest rates on auto loans and getting flexible payment periods, in turn potentially saving you up to hundreds, if not thousands of Ringgit. You could also have more options to choose from as most banks will prefer to deal with you.<\/p>\n

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Getting any type of loan requires you to commit finances to the asset for a long time, make sure you are ready to make such a commitment before you go ahead. <\/em><\/p>\n

In fact, your credit score plays an important role in almost all other financial product applications including a personal loan, mortgage, or credit card.<\/p>\n

Banks, financial institutions, and even businesses use this piece of information to evaluate the credibility of your financial health. It helps them understand the risks they might face if they decide to lend money to you.<\/p>\n

By the way, if you are on the lookout for a personal loan or credit card, it wouldn’t hurt to check out a comprehensive list of personal loans and credit cards on our website<\/a>.<\/p>\n

But before you dive into any commitments which require a loan, AKPK financial education trainer and Deputy President of Malaysian Financial Planning Councils Dr Desmond Chong Kok Fei told CompareHero that buyers must first understand the three Ps as a personal guide.<\/p>\n

First, he states, determine the Purpose of the loan<\/strong> – is it for consumption or is it a productive loan? The latter, for example, is when you get a loan to buy a car for work. Understanding why you need to get a loan<\/strong> will help you plan your finances better.<\/p>\n

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Figuring out how you intend to finance your car should be the first step when it comes to buying a car. <\/em><\/p>\n

Secondly, assess your Payment Capability<\/strong>. Banks will usually require a salary statement or a bank statement to assess whether a person qualifies for a loan. At the same time, they\u2019ll need a guarantor for the applicant to be eligible. This is where it\u2019s necessary to inform parents, guardians or close relatives about these plans, Chong said. Lastly, he stressed that loan applicants measure their debt service ratio, and ensure it\u2019s below 50% before proceeding. To understand what a debt service ratio is, check out this article<\/a>.<\/p>\n

Related:<\/strong> How do I calculate my Debt Service Ratio?<\/a><\/p>\n

Lastly, maintain an acceptable if not satisfactory Payment History<\/strong> moving forward. To be successful in any loan application, it\u2019s pertinent that applicants have and maintain good credit scores. A less than satisfactory score may lead to a rejected application.<\/p>\n

Overall, it\u2019s important to remember that the total cost of ownership of a car is significantly more than the actual price<\/strong> you pay at the store.<\/p>\n

That\u2019s because that cost includes depreciation, fuel, maintenance, repairs, and insurance<\/strong>. From these costs, depreciation or the loss in value over time makes up the highest (40%), according to a study<\/a>. Generally, foreign cars tend to hold their value a little better than domestic cars.<\/p>\n

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2. Used cars vs new cars – which is better?<\/h2>\n

One of the biggest dilemmas buyers tend to face is choosing between a used or new car. This important decision will make a big difference in your finances over the next several years.<\/p>\n

Before you come to a verdict, your decision will likely depend on you realizing that a car\u2019s value doesn\u2019t appreciate overtime,<\/strong> and whether you qualify for a car loan or if you need to pay for the car in cash<\/strong>.<\/p>\n

Unlike property or gold, a car is not an investment. Though it is an asset, it depreciates over time or the loss in value over time, making it less valuable to your wealth growth.<\/p>\n

Some of the advantages of getting a new car is the warranty<\/strong> that comes with it – most new cars will come with a few repairs in the first few years.<\/p>\n

Other than that, new cars generally offer financing at lower interest rates<\/strong> – which makes sense overtime as you can reduce the amount of interest you pay throughout your loan. Playing the long game, right?<\/p>\n

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There are many other variables to consider when choosing between old or new cars. List them out and compare the pros and cons of each. <\/em><\/p>\n

From an appearance and functionality standpoint, new cars will look edgier<\/strong> because they are improved versions of old models, and will have higher performance due to their newer technology<\/strong>, offering better gas mileage and lower gas emissions<\/strong> – conditions that will benefit both you and the environment in the long term. Newer cars may also have more seamless technology<\/strong> – self parking cars, integration of phone and cars etc.<\/p>\n

The disadvantages? The high price of a new car<\/strong>. As pointed out earlier, cars are not good long-term investments, so the moment it gets on the road, it drops in value. It may not make much financial sense to buy a new car seeing how you could be losing a lot in the first two to three years<\/a>. A brand new car can lose 15 to 30% of its resale value the second you drive it off the lot.<\/p>\n

\u201cSometimes buying a new car may not be as different (in price) compared to an old one,\u201d said Chong. \u201cBut if you buy a used car, and realize it\u2019s not a good fit, you\u2019ll experience more problems. For example, let’s say you buy a super rare old car, one that you hardly see on the road, you\u2019ll actually end up spending more. Some cars come with longer free maintenance, some cars don\u2019t have the spare parts in the country, sometimes cars use more fuel for example etc.- there are a lot of deciding factors to consider.\u201d<\/p>\n

But if you do decide to get a new car, Chong said it\u2019s important to think of other factors like resale value, its appearance, efficiency of fuel consumption, service outlets that are easily accessible, types of loans and maintenance period.<\/p>\n

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Based on this chart, the average vehicle depreciation value of a RM 50,000 new car after 10-years is 68%. Note that this was based on a chart created in 2018. (Image source: Allianz as seen on Carsome<\/a>)<\/em><\/p>\n

How do used cars fare then? Well, the biggest win for used cars is you get to avoid the largest depreciation in value<\/strong>, as the previous owner would be doing that for you. Reselling used cars may also make more financial sense because you could lose less money compared to selling a new car. If you are curious to know how much your car value has gone down, try this car market value calculator<\/a> by CarBase.my.<\/p>\n

From a money standpoint, there are several good reasons to buy used cars:<\/p>\n