If any of you are contemplating taking NINE year car loans, please dont. You will suffer financial loss.
If you have taken an "Islamic" housing loan to buy your terrace house, go and check with your neighbors who have taken conventional bank loans for their terrace houses and see how much they have been paying and for how long.
It is most likely that your neighbors who took conventional housing loans say 20 years ago or so have finished paying their instalments by now. But those of you who took the first generation "Islamic" financing are most likely still paying the "Islamic" bank.
The situation may have improved with the later generation Islamic loans because Bank Negara has stepped in a few times over the years to "streamline" Islamic financing with conventional banking.
Anyway we were at a Tesco this morning in a almost 100% Malay area. Someone stuck this on the car wiper. It is some local guy "arranging" car financing packages. His flyer lists car prices, loans, downpayments and monthly instalments.
First of all it is for Proton cars only. These are the lower end cars being sold at very high prices.
Before we go further, sales of high end cars like BMW has reached a record. In 2016 BMW outsold Mercedes. 10,900 BMWs were sold. Mercedes too has been clocking record sales. Plenty of the buyers of high end cars like Mercedes and BMW are non Malays, especially Chinese.
However sales of lower end cars like Perodua and Proton (the "Malay peoples' car) has dived 16% or so.
One of Super Moron's New Village hacks was trying to spin that the economy was in tip top condition because "car sales were up". Well yes for BMW, Mercedes and other luxury cars.
But the sales of lower end cars has been sliding ie Proton, Perodua and other lower end cars. These are the cars bought by largely Malay consumers.
Ok coming back to that NINE year car loan. Please look at that car financing flyer again. It has only one option for the term of the financing - NINE years (the last column). He does not offer 5 years, 6 years etc. Straight away 9 year financing.
Why? Because that is the cheapest or lowest monthly instalment.
Why? Because many Malay buyers go for the cheapest or lowest monthly instalments.
There is a huge trap here. Most cars (especially Protons) deteriorate in five years. And a 9 year old Proton is just junk grade.
As a rule of thumb, once you pass six years or seven years, the remaining second hand value of your Proton will be less than the remaining amount of money you owe on your car financing.
This means if you decide to sell your Proton after say six years, the price for which you sell it will be less than the amount that you still owe for the car loan. This means you will have to "top up" money to fully settle your car loan with the bank.
But if you take a maximum say 5 year car loan, and you decide to sell your car in the 3rd year, 4th year etc, then it is most likely that the second hand resale value of your car will bring in more than what you still owe the bank. You will not have to top up.
Many people, especially Malay buyers, are not aware of this 9 year car loan trap. All they want is the lowest monthly instalment payments.
(This 9 year car loan idea was part of the supermoronic plan to increase consumer credit so that our economic growth will be domestically driven !! Now not only does Malaysia have the highest household debt in Asia but the bankruptcies among Malays are reaching sky high proportions. I suspect these policies were deliberately crafted by anti-Melayu people who had strong influence on the tak-tahu-apa-bende kleptocracy.)
But the sales of lower end cars has been sliding ie Proton, Perodua and other lower end cars. These are the cars bought by largely Malay consumers.
Ok coming back to that NINE year car loan. Please look at that car financing flyer again. It has only one option for the term of the financing - NINE years (the last column). He does not offer 5 years, 6 years etc. Straight away 9 year financing.
Why? Because that is the cheapest or lowest monthly instalment.
Why? Because many Malay buyers go for the cheapest or lowest monthly instalments.
There is a huge trap here. Most cars (especially Protons) deteriorate in five years. And a 9 year old Proton is just junk grade.
As a rule of thumb, once you pass six years or seven years, the remaining second hand value of your Proton will be less than the remaining amount of money you owe on your car financing.
This means if you decide to sell your Proton after say six years, the price for which you sell it will be less than the amount that you still owe for the car loan. This means you will have to "top up" money to fully settle your car loan with the bank.
But if you take a maximum say 5 year car loan, and you decide to sell your car in the 3rd year, 4th year etc, then it is most likely that the second hand resale value of your car will bring in more than what you still owe the bank. You will not have to top up.
Many people, especially Malay buyers, are not aware of this 9 year car loan trap. All they want is the lowest monthly instalment payments.
(This 9 year car loan idea was part of the supermoronic plan to increase consumer credit so that our economic growth will be domestically driven !! Now not only does Malaysia have the highest household debt in Asia but the bankruptcies among Malays are reaching sky high proportions. I suspect these policies were deliberately crafted by anti-Melayu people who had strong influence on the tak-tahu-apa-bende kleptocracy.)
Of course a 5 year car loan requires a higher earnings capacity to pay higher monthly instalments plus a higher up front deposit.
Forget about high income nation. Too many Malays are now going from low income to no income.
University professors, Tourism Malaysia staff, oil and gas workers, newspaper workers are all being laid off or losing their jobs. They are headed straight for "no income" status.
They will drive their cars until the gas runs out. Then they will get down and just stand there not knowing what to do.
Its happening already.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.