Deciding To Buy A Car Is Often AnIssue Nowadays

Purchasing a car will be one of the significant decisions you make as soon as you begin working. Although cars are a pleasant form of transportation, it’s vital to remember that having a car involves more than just making monthly payments. Owning a car also involves other costs
such as petrol, toll payment, car parking, road tax, insurance, maintenance costs, and the cost
of repairing the car when damaged.

Should I purchase a new or used car?

You need to decide whether to buy a new or used car when a car is necessary. Many people think buying a new car is better because the maintenance cost is lower, but owning a new car also has disadvantages.

You should evaluate your capabilities when deciding what kind of car is needed. If buying a new car is too expensive for you, consider purchasing a used car that is still in good condition.

WISE TIPS ON BUYING A CAR
● Make a comparison to get a car that will suit your needs and expectations. It’s good to ask for advice from a family member or friend.

● If you want to buy a used car, get the services of a reliable mechanic or do a
PUSPAKOM inspection on it.r

● Consider the resale price if you intend to trade in the car later.

● If you opt to apply for a car loan, find the best deal based on your capabilities. Obtain
details regarding the applicable interest rate.

● Frame your budget according to your income, taking into account the monthly
installments of the car and other costs such as petrol, tolls, car parking, and other
expenses including road tax, insurance, and maintenance.

How To Finance My Car?

Hire purchase is the rental of goods with the option to purchase them at the end of the loan term. Typically, people will buy a car using a hire purchase loan.

By taking out a hire-purchase loan, you will be known as a tenant and a financial institution that provides finance as a car owner. As a tenant, you must make installments based on the terms and conditions agreed upon under the rental purchase agreement. You will get ownership of the vehicle once all installments have been paid.

What Is My Ability?

The interest rate for a car loan is usually calculated on an equal basis. According to the Hire Purchase Act 1967, the maximum allowable interest rate is 10% per annum. The interest count is based on interest on the principal amount for the entire period of the hire purchase loan.

Its calculation can be seen in the following example:

Car price
Advance payment @ 10%
Total hire purchase loan
Interest rate (equal rate)
Loan tenure
= RM 50 000
= RM 5 000
= RM 45 000
= 5% Per annum
= 5 years (60 months)
Calculation

Amount of interest charged
= Loan amount X Year X Rate
= RM 45 000 X 5% X 5
= RM 11250

Loan amount + Interest
= RM 45 000 + RM 11 250
= RM 56 250

Total monthly installment
= RM 56 250/60 months
= RM938

Other Things To Keep An Eye Out For During Car Hire Purchase

Late payment charges

According to the Hire Purchase Act 1967, the maximum late payment charge on outstanding installments calculated daily is 8% per annum. Therefore, you should pay the hire purchase installments before the payment due date to avoid late payment charges and the repossession of your car.

Retraction clause

The financial institution may repossess the car under the following conditions:

● When the tenant fails to pay two consecutive installments or the final installments
● If the tenant dies and the installments are not paid for four consecutive months

To retrieve the car, the tenant must pay the retrieval fee, storing fees, past-due installment
payment, and late payment penalties.



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