Online shopping and credit cards are contributing to the debt trap. — 123rf
FIRST-time buyers are advised to be realistic about their ability to service bank loans when getting a new car.
Johor Bumiputra Consumer Association chairman Syed Abdullah Syed Mohamed said many people got into financial difficulties due to debts.
“You need to pay attention to your financial means, particularly cash flow, when buying a big-ticket item like a car or house.
“Don’t buy a model beyond your financial means if your intention is to show off to your friends or relatives,” he said when contacted.
Tee: In today’s lifestyle, many want to show off by buying branded items.Syed Abdullah added that there were other expenses
borrowers needed to look into such as parking fees, toll payments, car insurance and road tax before signing on the dotted line.
He also advised those starting employment to only buy a new car a few years after working.
“Financial institutions should also be more stringent when approving loans, including for cars, and ensure borrowers are able to service their monthly payments,” said Syed Abdullah.
It was reported that a private sector employee earning RM4,000 a month was heavily in debt after buying a new car costing more than RM100,000.
A report in a Malay daily quoting him as saying that he bought the car to show off to his friends but he could not afford to pay for it.
Former Johor tourism, domestic trade and consumerism committee chairman Datuk Tee Siew Kiong said applicants should know whether they had the financial means to service a bank loan before applying for one.
It was reported that statistics from the Consumer and Borrower Settlement Association of Malaysia (4PM) showed that from 2019 to August 2023, the highest number of bankrupt individuals were aged 35 to 44 (13,757 people), followed by those aged 55 and above (5,549).
“In today’s lifestyle, many want to show off by buying branded items,” Tee noted.
He said shopping was made easier nowadays at the click of a button with ecommerce and with credit cards to cover monthly expenses.
“We need to look at ways to promote and encourage saving from a young age.” — By ZAZALI MUSA
