Things to keep in mind when buying a car in Malaysia
1. There are almost no reliable cars below the RM5000 mark. Cars that are sold below RM5k often need repairs which could easily add a couple of thousand ringgits. Be prepared to pay at least RM7.000 to RM10.000 for an old (10+ year old) car.
2. A new car easily costs over RM100.000 in Malaysia. If you want to drive an American or European brand then be prepared to fork up a few hundred thousand ringgits. Even a BMW of at least 5 years old may cost well over RM150.000.
3. Most common brands in Malaysia are Proton, Toyota, Honda and Hyundai. Most common European cars are BMW and Mercedes. Audi is currently gaining popularity (weird enough some locals have the impression that Audi is of less quality compared to BMW and Mercedes).
4. Banks are usually eager to give out (new) loans. Expats usually have a bigger income compared to locals, though expats also often stay less long in Malaysia. Loans are available but there may be restrictions in place (like a shorter payback time which means higher monthly costs). When you take up a loan there is usually a down payment of at least 10%. To get the loan you need to bring along bank statements (that proves your income), your passport with work-permit and often a company letter. A general rule of thumb is that you must have a salary of at least 3 to 5 times the monthly payment in order to get a loan. The interest rates for a new car are usually between 2% and 4% per year (second hand cars between 4% and 8%). Loans that can be applied are typically for around 10 years in case of a new car.
5. Proton, the national car of Malaysia, is perhaps not the best or nicest car to drive; however it is a car that everybody drives in Malaysia. This means that there is much knowledge at repair garages and parts are also less expensive. If you are on a tight budget, you are probably best off with a Proton car.
6. Make sure you bring along a local that at least speaks Bahasa Malayu. Chinese is often even better (as the 2nd hand car market is mostly dominated by Chinese Malaysians).
7. Check the service record to verify the vehicle’s history and mileage.
8. Have the vehicle tested by an independent service/repair shop and use the outcome to haggle on the price.
9. Use places like Mudah.com.my to get an impression on prices for a certain type, year and model. If you see a car for sale for half the regular 2nd hand value then ask yourself the question what might be wrong with it. Believe it or not; it is not uncommon to see stolen cars offered for sale.
10. Don’t believe most of the unique selling points. In Malaysia every 2nd hand car only had 1 previous owner, who is always 76 years old and always used to be a school teacher that only drove 50.000 kilometers in all those years.
11. Take the car for a test drive. Check whether essential functions like brakes, tires, clutch, gearbox, visors, lights, doors, electric windows (if any), central door lock and air-condition are working.
12. Cars keep their value more in Malaysia then in other countries. If you buy a car for RM15.000 chances are that two years later the car is still worth around RM13.000. Brand new cars do lose value immediately after buying the car (around 30% max).
13. Please check that the vehicle is actually owned by the seller. This can be done at JPJ (Jabatan Pengangkutan Jalan).
14. When you are buying the car you head over to JPJ near Amcorp Mall in Petaling Jaya just outside KL city center to have it registered under your name.
15. Only after you have registered the car under your name (and made sure up front that there are no outstanding loans, warrants and after the official car inspection) you will do the payment.
16. In Malaysia people can take up a loan (similar to a mortgage) on a car that is transferable after the sale. This means you can buy a car with an outstanding loan. Always check the background or history of the vehicle if possible before deciding to buy the vehicle for sale.
17. If you bring your car to a regular repair shop; always join the mechanic for a short drive to test the car. Our experiences are that they tend to fix the problem(s) at hand, but often do not look further than that. This means that there is a chance that you will run into new problems. Always be alert and always ask how many days of warranty come with the repairs.
18. If you run into trouble on the road be sure to have proper insurance. Our experience with Axa is pretty good. We ran into troubles a few times with our cheap car and we never had to wait for more than two hours for the towing company to arrive. Be sure to keep the number of your insurance company at hand.
19. Never rush into buying a car. Also try and find a trustworthy source first that has no ties with a dealer (or seller) whatsoever. Do not put too much trust in the advertisements you often see along the roads. Always make sure all the documents are in order and there has not been tampered with the car.
20. If you are selling your car (private sale) then always make sure payment is done in cash on delivery. There have been many cases of expats being fooled without any time left to actually solve the issues.