Are you looking to buy a used car or second hand car but not sure where to begin? Whether you’ve got your eye on a cool continental or a reliable ride for you and your family, Mudah.my is here to guide you on the steps of buying a car in Malaysia.
From calculating your monthly repayment to handling paperwork and legally owning a car, we’ve got your back with all you need to know.
Bookmark this as a handy checklist to prepare for when buying a car so you won’t miss out on anything important!
How To Buy A Used Car In Malaysia With 6 Easy Steps
1. Calculate your affordability
First things first, let’s talk about money. In most cases, you’ll pay for the car with your monthly salary. Based on that and the monthly car loan repayment, you can get a rough idea of the car price you can afford.
Here’s an example of how to calculate monthly car loan repayment:
Car selling price: RM95,000
Loan period: 7 years*
Loan interest rate: 3.7%*
Downpayment: RM9,500 (10% of car’s selling price)
Monthly repayment amount for 7 years: RM1,281
*May differ based on loan tenure and financial institution.
If you have a gross monthly salary of RM4,500, you will have RM3,219 left after deducting the monthly cost of your car. You can use this calculation to work your way backwards to estimate your car affordability but don’t forget essential expenses like road tax, car insurance, service and maintenance, petrol, toll and parking, and more.
P/S: Check the monthly car loan repayment for cars on sale on Mudah.my easily! Just click on any car listing and refer to the car loan calculator on the right.
2. Identify the car you want to buy
Now that you have a clearer picture of the car price range you can afford, the next step is to look for a car within your budget that suits your requirements. Begin browsing websites to buy used cars and second hand cars like Mudah.my, and pay close attention to the car’s condition, specification, and price.
Some things are best seen in person, and that includes cars. Where possible, visit the car dealership to check out the car for yourself. If you’re satisfied, proceed to the next step in the car-buying process: taking it for a test drive!
3. Test drive the car
Before you sign the sale agreement, test drive the car to ensure it’s in good condition and you like how it drives and feels. Envision yourself with the car for a few years and in different circumstances or weather conditions – do you still feel secure and happy with it?
Besides that, don’t forget the important things to check before buying a used car, like the car’s mileage, accident history, service history, engine and overall car condition, and its basic functions.
4. Check your loan eligibility and apply for a loan
To successfully obtain a car loan, you need a healthy credit score, a decent income to afford the loan, and a Debt Service Ratio (DSR) that does not exceed the maximum limit. Check your credit score via CCRIS or CTOS, while your DSR can be calculated using a formula banks use to identify your eligibility and ability to repay the loan.
How to calculate Debt Service Ratio:
(Total monthly commitments + Monthly car loan you’re applying for) ÷ Net income (after EPF, SOCSO, tax, etc.) = X × 100.
Here’s how to calculate Debt Service Ratio with examples:
Total monthly commitments: RM1,000
Monthly car loan you’re applying for: RM1,300
Net income: RM4,500
(RM1,000 + RM1,300) ÷ RM4,500 = 0.51 × 100 = 51% DSR.
Each financial institution has varying DSR limits and calculations, so the best way to secure a loan is to ensure you repay all your debts on time and as much as possible. Plus, you can check your loan eligibility with our Auto Mall pre-loan financing check. Remember, you want to show the banks your good repayment record to qualify for that loan.
In the meantime, prepare these documents for your car loan application:
- A copy of your Identity Card (front and back);
- A copy of your driving licence (make sure it’s valid!);
- A copy of your last drawn salary for the past three months;
- Copies of your bank statements for the past three months;
- A copy of your latest EPF statement or EA Form; and
- Other requested supporting documents.
5. Complete the car grant transfer
Your car grant, also known as the Vehicle Ownership Certificate (VOC), can be transferred using two methods: offline and online. The offline method will require the seller to head to the Road Transport Department (known as JPJ) to fill in some documents and process the transfer. A confirmation slip will also be issued for the buyer to complete.
These are the documents buyers will need to transfer the car grant:
- Your Identity Card
- A completed copy of the ownership transfer confirmation slip
- Fill in the JPJ K3 form
Bring these documents to your nearest JPJ to process the vehicle ownership transfer, and after a biometric authentication, you’re ready to collect your new car grant!
As for the online alternative, the ownership transfer is done with the STMSR virtual platform by MyEG. The documents and requirements are similar, but easier as neither buyer nor seller will need to go to JPJ.
6. Update car warranty, insurance, and road tax
Now that your car is officially yours, the last thing to do is ensure its protection. Buying second hand cars may come with a warranty to safeguard your drive, but you can also ask for it if it’s not part of the deal. Mudah Certified cars come with a free 1-year warranty, so you can buy and drive home with peace of mind.
Aside from the warranty, invest in good car insurance coverage and remember to pay your compulsory road tax. Once that’s all done and dusted, you’re all set and ready to go.
The Benefits Of Buying Used Cars
A used car is considerably more affordable, money-saving, environmentally friendly, and has cheaper insurance rates. Cars are assets that depreciate over time, so you won’t lose much compared to purchasing a new one.
Buying a car is not as complicated as it seems, especially when you have helpful and reliable people to advise you on your options to drive home a dream ride. Think practically before you buy, and always weigh your pros and cons before any big purchases.