Used car sales have spiked since the government announced Penjana, its short-term economic stimulus plan. While the relief measures outlined for the automotive sector do not directly benefit the used car industry, the knock-on effect seems to have done so, as The Star reports.
According to Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) president Datuk Tony Khor, the demand for used cars has surged since the economy began reopening, to the point that it is “simply too good to believe.”
“Year-on-year, used car sales in July have gone up more than 20%. On a month-on-month basis, sales are up 30% compared with June. Year-on-year June sales jumped more than 100%. This is historic, ” he told the publication.
He attributed the rise in used car sales to the increase in new vehicle sales, which has been spurred by the 100% sales tax exemption on locally-assembled (CKD) models and 50% on fully-imported (CBU) models until the end of the year. “As more people buy new cars, the more they will need to trade-in their old ones,” he said.
The increased demand for used cars was also due to many downgrading to cheaper vehicles in light of the economic uncertainty following the Covid-19 pandemic, essentially pointing to cheaper cars being the main driver of that increased volume.
As indicated by Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad at the association’s first half market review briefing last week, used car sales for vehicles priced below RM30,000 were doing very well, especially out of KL.
Khor said that the outbreak had also deterred people from using public transport, resulting in more purchasing a vehicle to move about in safer fashion. “Many prefer to use their own cars,” he said. He added that the six-month moratorium, which ends in September, has also helped to drive sales, but said that car sales might be impacted if the government does not offer any type of incentive once the moratorium ends.
About the only negative is that the waiting period for a purchase has also gotten longer. As Khor explained, used car sales have been so good that Puspakom is having trouble coping with the increased volume of vehicles coming in for inspection.
“A car for sale must first be inspected by Puspakom. The standard operating procedure is that when the vehicle is booked, it will be sent for inspection by the next day. But right now, the waiting period has been extended to between five and seven days,” he said, adding that some customers cancelled their bookings because the inspection time was too long a period to wait.
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.
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