Saturday, October 27, 2012

'Longer repayments won't solve high car price woes'

7:26AM Oct 26, 2012 
Increasing the period for car loan repayments is not the answer to reduce the rakyat's burden from high car prices, said opposition party PKR.

"Lengthening the repayment period to give the impression that car prices are lower is a move that won't solve problems, indeed it will burden the rakyat with a longer interest payment period," argued its director of strategy Rafizi Ramli in a statement.

On the contrary, he believed that such schemes are leading many young Malaysians into indebtedness early in their lives.

TNONEhe party was responding to International Trade and Industry Minister Mustapa Mohamed's parliamentary answer on Wednesday that the governmenthas no plans to cut car excise duties.

Mustapa (right) mentioned that flexi-payment schemes offered by banks specifically to students and graduates that offer longer repayment periods can help the rakyat deal with high car prices.

"His statement in the Dewan Rakyat that the payment schemes offered to students and graduates can help reduce the burden of high car prices is erroneous and dangerous," claimed Rafizi.

Hidden taxation

The root problem of such high car prices, posited Rafizi, is the extremely high excise duty and other taxes which can inflate car prices by as much as 100 percent.

NONE"Such hidden taxation system used by BN all this while has caused the rakyat to be burdened by long periods of indebtedness by paying government taxes."

Rafizi (left) said that his calculations on current prices and loan repayments for popular car models show that a young person earning about RM1,800 would have to spent about 53 percent of his or her income to repay car loans.

Excise duties, he said, are inflating repayment to about double what it would be without the additional government tax.

Rafizi reiterated PKR's stand that eliminating excise duties is still be the best way to reduce the burden and indebtedness of the rakyat.

~ Malaysiakini


Dominic Duncan said...

Yes, in a sense you have a point there. Increasing car loans' isn't the solution for the continuous increase in car prices it is about the price and the loan's interest itself. I think to be able to totally cut down the burden of paying the car's cost is by lessening the interest rate of it and provide other payment choices to the buyers.

Matthew Meriwether said...

Dominic was right! Increasing auto loans for people with bad credit doesn’t affect the increase in car prices. They should cut the price in the tax that we’re paying in our loans.

Vicki Tower said...

Auto financing for bad credit should also be considered in car pricing. tax systems are regulated by this and that they should consider to decrease loan payment.

Alejandro Grande said...

I wonder if some people know what is salary packaging because this can help them regarding high car price woes. Increasing the period can never help solve this issue and I witnessed a lot of people who can never get out of it.

choose car loans said...
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Anonymous said...

Paying 53% of your income for car repayments is not financially wise. It would lead to indebtedness of fresh graduates.

-Mia Leehy