CAR buyers who initially wanted to withdraw bookings for new vehicles, have now decided to wait it out with the Government’s announcement of the extension of sales and services tax (SST) exemption until June 30.
Car sales advisor Carlson Yu said some of his customers who were on the waiting list, had wanted to cancel their bookings as the exemption was originally due to end in December last year.
“But when the Government announced that the exemption will be extended for another six months, they changed their mind and decided to continue waiting, ” he said in Penang recently.
The SST exemption, which started on June 15,2020, was recently extended until June 30 this year.
Car sales manager Danny Choo said most of his customers were booking new vehicles not because of the SST exemption, but because they like the particular make.
“There is really not much impact on sales of cars despite the announcement of the extension by the Government, ” he said.
He said there were more than 250 units of Proton X50 models booked by customers since last year and they were still waiting for the units as they like the model’s features.
He pointed out that sales of mid-range priced cars between RM90,000 and RM120,000 had improved but cars priced below RM50,000 recorded lower sales.
“However, overall sales of cars have improved by about 30% to 40% compared to last year, ” he said.
Choo added that bank approval rates for customers who applied for loans to buy high-end cars were almost 100% whereas nearly half of the loan applications for cheaper cars were denied.
He noted that this could be due to the applicant not being able to fulfil financial requirements needed by the bank.
Last year, the Finance Ministry announced that the vehicle sales tax exemption, which was supposed to end on Dec 31 last year, was extended until June 30 this year.
The tax exemption is for passenger cars including multi-purpose vehicles (MPVs) and sport utility vehicles (SUVs).
Without the exemption, sales tax for vehicles is set at 10% for both locally assembled and imported cars.
With the exemption, sales tax is fully waived for the purchase of locally assembled cars while a 5% tax is imposed on imported cars.
Company administration clerk Hakimah Hari, 28, said she was tempted to buy a new car with the announcement of the tax exemption extension, but would adopt the wait-and-see approach for now.
The single mother said she would keep her old car, which she still has to service the loan for another three years.
“The new Proton X50 looks very attractive. But, I will control my impulse and be satisfied with my present car which is still in good condition, ” she said when met at a car showroom in Bayan Lepas.
Journalist Hasliza Nusi, 35, said she still found the car prices high even with the exemption extended for another six months.
She urged the Government to regulate the sales of cars and monitor the tax exemption exercise to avoid any abuse by car dealers in the country.
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