Buying A Used Car in Malaysia

Note : This is a personal view & sharing on the writer's experience - on buying used car with direct owner

Q: Why buy a used car?
- it can save you about 50% of the cost of a new car
- new car depreciates fast
- you won't be so easily freak out when something minor hit/ scratch your car (if its' a used car)

You can actually get a good deal, if you manage to source for a good condition used car. However, buying used car can be time consuming and its procedure can be complex. If you are getting a loan, the used car loan interest rate can be higher than those of the new car.

(I) Things to consider for buying used car
- what car model you want
- your budget
- buying from car dealer or direct owner
- locations (for easier viewing & test drive) 

Buying from car dealer may save you the hassle, but you may not able to know the history of the previous car owner. Whilst buying from a direct owner, you get to view the car at his house/ chat with the direct owner to find out his job, background & reason of selling. From there it gives you some idea on how well the owner take cares of the vehicle, how often the vehicle being driven etc.

(II) Schedule for car viewing
- Examine the car
- Interview the seller
- Ask for test drive
- Have a look at the grant (registration card)
- Find out if the car is still on loan and how much is the outstanding balance.
- Negotiate a price
- Pay a booking fee (about RM500) & sign a simple earnest money receipt agreement. Get a copy of it, together with the registration card.

(III) Process of Hire Purchase Loan
If you are buying with Hire Purchase Loan.

1. Enquire from a few banks to find out : the requirements, interest rates, max. loan amount, max. loan tenure period, car market price & if the bank does interbank settlement (for direct owner that still has outstanding loan balance). Bring along the registration card copy.

2. Submit application to bank (hire purchase department) with the following:
- your I/C photocopy
- driving licence photocopy
- latest 3 months payslip
- EPF / 3 months bank statement
*Public Bank loan approval takes about 2- 3 days

If you (buyer) still have outstanding with PTPTN, you need to pay it off & get a clearance letter then pass it to the bank.
Public Bank does not do interbank settlement. Since I apply HP loan with Public Bank, the direct owner (seller) still has outstanding loan balance with the car, so seller need to pay it off & get a clearance letter then pass the letter to Public Bank.


(IV) Puspakom Inspection
- seller has to bring the vehicle to Puspakom for inspection to get B5 & B7 report.
- Once B5 & B7 report "Lulus" is out, seller has to pass it to your bank
*note that buyer has to pay for the Puspakom inspection which cost RM 95.40 include GST6%. (RM30 B5 + RM60 B7).

(V). Buyer make payment & sign documents at the bank
- Insurance for the car
- Hire Purchase Decreasing Term Assurance (insure for the loan)
- Downpayment (eg. 10% deposit of the car selling price)
- Transfer fee (around RM 450)
*Bank will update buyer on when to start paying for the monthly installment.

(VI). Ownership transfer at JPJ

JPJ @UTC Pudu Sentral office hour (for ownership transfer)
Monday to Sunday:  8.30am - 5.00pm

- seller & buyer meet at the JPJ, bringing along
> original & photocopy of I/C (MyKad)
> JPJ K3 form (can get from JPJ/ download online - buyer & seller details in 1 form)
> original grant (vehicle registration card)
> original B5 report
> original road tax stickers (if seller intend to terminate it)
- the car cannot be transferred to you if seller still has any summons on the car
- pay RM 100 for ownership transfer (borne by buyer)
- pay RM 50 for hire purchase ownership (borne by buyer)
- if seller terminate the road tax, buyer can purchase road tax RM 90 on the spot.
- JPJ will issue a new grant to you, which you need to pass it to the bank

At this point, you can start driving the car if the seller agrees to it.

(VII). Bank Disbursement to seller  
Within a few days, your bank will then disburse the total car selling price to the seller.

FRIENDLY NOTE:
+ It's a courtesy for both buyer & seller to update one another on the progress (eg. status of the loan, Puspakom inspection done etc)
+ It's good to consider if you feel comfortable buying from the seller, in the event there's problem with the car, you can still try to talk to seller in good terms. Likewise for seller.


Hope you find this post informative  :)


>>> You might be interested to read: How to choose a good used car?