Used car dealers appeal for end to red tape

Khor (left) suggested that the eAuto system be directly linked to the police at FMCCAM’s 45th annual general meeting. — CHAN BOON KAI/The Star

THE government has been urged to streamline the process for second-hand car dealers to obtain a licence to operate.

Federation of Motor and Credit Companies Associations of Malaysia (FMCCAM) president Datuk Tony Khor urged the Home Ministry to simplify procedures under the Second-Hand Dealers Act 1946 (Revised 1977).

He highlighted that under the current procedure, many used car dealers must obtain approval and support from six government agencies, including local authorities.

“Used car dealers often have to wait a long time to obtain this approval or support, which then affects the timeline when issuing a licence to dealers,” said Khor.

He pointed out that used car dealers sell cars from an open space and were not dealing with waste or scrap metal.

“However, local governments have classified used cars as waste or scrap metal,” he said during FMCCAM’s 45th annual general meeting in Penang.

He said FMCCAM hoped that the police could eliminate or abolish the procedures that required support from local governments and other departments, and allow used car dealers to apply for licences direct from them.

Khor also suggested that the eAuto system be directly linked to the police, without the need for physical applications.

“Currently, there are approximately 5,000 car dealerships involved in buying and selling second-hand cars in the country.

“However, the number of dealerships that have successfully registered with the police is below 2,200, less than half of the total.

“This is because used cars are classified under the waste or scrap metal category.

“With many of our shops located along main roads, obtaining approval from a local council’s town planners is nearly impossible,” he said.

Khor said the law, which was to help police monitor stolen goods, had an adverse effect on their business.

“All used cars have engine and chassis numbers.

“A licence is required to establish a used car business.

“Once a licence is issued, each dealer has to record every sale in a book, which can be inspected by the police when needed.

“We urge the Home Ministry to streamline the process as the dealers are already connected through the eAuto system, where every sale is logged.

“This system should be integrated with the relevant authorities, providing sufficient protection against stolen goods and unscrupulous dealers,” he said.

Khor also hoped consumers would be more open to buying second-hand vehicles rather than new ones, as their average sales had not increased in years.

“Used car sales have remained at an average of 400,000 annually (as of 2022), while new car sales reached approximately 720,000 in the same year,” he said.

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