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Increased Demand for Used Cars in Malaysia, Q3 2020

· Cost Saving Tips,Industry Updates

Bernama reported a strong sales number of used car markets and saw a surge in demand during the third quarter of 2020. According to Datuk Tony Khor, president of the Federation of Motor and Credit Companies Association of Malaysia (FMCCAM), July sales 2020 saw a 25% increase to 37,800 units compared to the same month last year. Meanwhile, both August and September also achieved a year-on-year growth of 17%.

This is because incentives from the government during the movement control order (MCO), especially the tax exemption and moratorium drove more sales since June. “We secured sales of 112,400 units for the last three months,” said Khor.

Besides, the Q3 used car sales brought the year-to-date (YTD) figure to circa 280,000 units and the industry’s average yearly sales was matched as demand stays brisk in view of the ongoing tax holiday. The average yearly turnover for used cars in recent years has been around 400,000 units, which is worth over RM15 billion in total, based on an average value of RM40,000 a unit.

Used vehicles have become a hot commodity in light of the Covid-19 pandemic. Many people are looking to control their financials during the volatile economic climate, and used cars are a cheaper way for people to buy and drive their own car.

Used cars priced between RM30,000 and RM40,000 received the highest demand from potential buyers during this pandemic. “The number one sellable used car in the market is Perodua Myvi. It is the most [sought after]. Myvi is the number one [choice],” Khor further added. Other popular models include the Toyota Vios, Honda City as well as the Proton Saga and Persona.

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Khor also said that business was brisk for top sellable, low-mileage used cars. With cars like the Perodua Myvi being traded very frequently, they seldom appear in advertisements. This is because the sellable cars are so popular that they don't even need promotions and advertisements. Also, the demand for the Myvi has also ensured that the model’s resale value remains high.

“Although the sales tax exemption is expected to keep demand steady, buying sentiment in Q4 is expected to turn cautious as the moratorium incentive ends,” Khor said. Despite encouraging sales in the used car market over the past few months, Khor cautioned that this trend may be short-lived and could end following the end of the six-month loan moratorium.

“[The] buying mood has slowed down in October. We hope the government could announce another three-month extension of the loan repayment moratorium until December 31 to further support the industry during the pandemic,” he added.

If you are looking for a new ride, or you’re considering a used car but unsure if you should take the plunge, we are here to help. Don’t hesitate to contact us for any assistance.