No more full financing for car purchases?
A local brand car saleswoman said she also expected the demand for local brand vehicles to decline compared to foreign brands.
SHAH ALAM - Car sales are expected to see a decline in demand this August due to rumours of the elimination of full financing for vehicle purchases.
A car salesman who wanted to be known as Amzar said under the new regulation, anyone who wanted to buy a vehicle must provide at least a 10 per cent down payment.
"Out of 100 vehicles, 60 per cent of them are bought by customers who use full financing services.
"Not everyone can afford to provide a 10 per cent down payment. Because of this, I expect vehicle sales to start declining this August," he said when contacted.
Amzar added that the new implementation involved the e-invoice method, which required three parties which were the banks, dealers and vehicle companies to send invoices to the government.
He explained that this situation led to all three parties having to submit the exact same vehicle price, without any discrepancies.
Previously, allegations circulated that the government would use e-invoices in the vehicle sales system, thereby eliminating full financing for car purchases.
Meanwhile, a local brand car saleswoman known as Aisha said she also expected the demand for local brand vehicles to decline compared to foreign brands.
"Some buyers believe it is better to use their down payment money for an imported brand rather than a local one.
"For example, a 10 per cent down payment for a local car is RM4,700, while for an imported brand car it is RM5,500. Of course, they would choose the foreign car," she said.
Aisha noted that the anticipated decline in demand was because people preferred to save rather than spend.
Meanwhile, the Malaysian Automotive Association (MAA) announced that it would respond to the matter in a press conference on July 16.
INFO
E-invoice is a digital representation of transactions carried out between sellers and buyers. It contained the same essential information as traditional documents, such as seller and buyer details, item descriptions, quantities, prices excluding tax, tax and the total amount, recording transaction data for daily business operations.
Two e-invoice delivery mechanism options:
1. MyInvois Portal
- Hosted by the Inland Revenue Board of Malaysia (IRB)
- Accessible to all taxpayers at no cost
- Also accessible to taxpayers who need to issue e-invoices when the Application Programming Interface (API) connection is unavailable
2. Application Programming Interface (API)
- A set of programming codes enabling direct data transmission between the taxpayer's system and the MyInvois System
- Requires initial investment in technology and adjustments to existing systems
- Suitable for large taxpayers or businesses with a high volume of transactions
Benefits of e-invoice:
- Reduces manual processes and errors
- Facilitates form submission
- Increases operational efficiency
- Digitises tax and financial reporting
E-invoice implementation timeline:
- Taxpayers with annual income or sales exceeding RM100 million (Aug 1, 2024)
- Taxpayers with annual income or sales exceeding RM25 million and up to RM100 million (Jan 1, 2025)
- All taxpayers (July 1, 2025)
Source: LHDNM website
