Monday, May 16, 2011
Used car sales may be hit by amended Act
The sales of used cars in the country are likely to be affected this year due to the implementation of the amended Hire Purchase Act (HPA) 1967 from next month.
Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor said the amended HPA which required the used car dealer to refund 90% of the 1% deposit should the buyer decide not to buy the second hand car.
“The implementation of the amended HPA would create a situation that is not fair to both the customer and the used car dealer and it would slow down the transactions of used cars.
“Imagine these two scenarios. The used car dealer spends two weeks to a month to process the loan documents, reserve the vehicle for the customer and miss opportunities to sell it for a better price and he has to refund a substantial portion of the deposit if the customer changed his mind about buying the vehicle.
“This is not fair to the used car dealer who has wasted his time preparing the necessary sale and loan documents and missed better business opportunities.
“It is also not fair to the customer. If the customer can change his mind about buying the used car, then similarly the used car dealer can break his promise to reserve the vehicle for the customer and sell it at a higher price and he only needs to refund 90% of the deposit.
”The implementation will create a confusing and impractical situation as there is no longer any commitment from either the customer or the used car dealer and this will slow down used car transactions in the country.
”The act will not have a significant impact on the purchase of new cars,” Khor added.
Khor urged the Government to delay the implementation of the amended HPA to allow for more discussions to be held.
He also urged the Government to make the double inspections by Puspakom for used cars before they were transferred to a new ownership into a single inspection.
”This will save cost and time for buyers,” he added.
The used car industry was impacted by the removal of the voluntary scrap scheme in late 2009, which allowed car owners to turn in vehicles of more than 10 years for a RM5,000 discount to buy a new Proton or Perodua, Khor said.
“Last year, the used car industry did not achieve the targeted sales of 600,000 units as the voluntary scrap scheme was removed in late 2009.
“The sales of used cars for 2010 were about 480,000. We hope to maintain more or less the same figure this year, which could, however, be affected due to the implementation of the amended HPA.
”The voluntary scrap scheme should be revived and provide participants of the programme with a wider choice of completely-knocked-down cars to buy.
”This would increase the demand for more locally made automotive parts, hence creating more jobs.
“The voluntary scrap scheme's revival will boost domestic sales of new cars to one million yearly, compared with about 600,000 units yearly now.”