Fear of public transport driving up used-car sales, say dealers

Sales of used-cars have picked up again after the three-month Covid-19 lockdown, say dealers.

KUALA LUMPUR: Used-car dealers are smiling again as sales are going up after the three-month Covid-19 lockdown – and many buyers are those who have decided to ditch public transport.

Tony Khor, president of the Federation of Motor and Credit Companies Association of Malaysia, said most buyers no longer feel comfortable using public transport.

“Our customers say they prefer to drive their own cars after Covid-19. They feel safer,” he told FMT.

He said used-car dealers did not expect this trend and had been bracing themselves for hard times.

But a recent government announcement of 100% sales tax exemption until Dec 31 on locally made cars and 50% for imported cars had led to an increase in sales.

Demand was rising for Japanese cars of about five years in age and those that are below RM30,000. The highest number of sales were in Perak, Johor and Kedah: most of the customers had formerly used express bus to travel interstate.

However, sales of used-cars that cost more than RM110,000 are “still very low”.

In the Kuala Lumpur area, those with old cars are taking advantage of the sales tax exemption to trade in their cars. “But they are not going for very expensive cars, still below RM150,000,” he said.

However, he said dealers are unhappy with the vehicle inspection agency Puspakom, because ownership transfers and mandatory vehicle checks were taking longer.

“It is taking more than seven days and it may take longer as we get more orders,” said Khor.

The process used to take a day but Puspakom no longer allows walk-in customers without online registration and they have to wait for their turn.

A second-hand car dealer at Old Klang Road told FMT that his clients are concerned about using public transport after the Covid-19 crisis.

“Most of them buy cars that cost RM30,000 to RM40,000 for their own use,” said the dealer, who wanted to be known as Tan.

He said he had one client who wanted to own a car as an emergency shelter to live in temporarily. “He told me he is not sure if he will still have a job, and he was looking for a cheap car,” he said. The purchase is still pending.

In April, as the country began a shutdown of public activities to contain the Covid-19 outbreak, only 141 vehicles were sold, a mere 0.3% of the monthly sales of 49,935 units recorded in April last year.

Total sales from January to April stood at 106,601 units, compared with 192,971 in the same period last year.

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