PETALING JAYA: It is now a “double whammy” for those looking for any car.
The shortage of new cars caused by a shortage of chips and spares has now spilt over to the used car industry, with dealers also facing a shortage of stock.
This is because the extended wait for new cars, stretching for up to six months in some cases, has made people hold on to their old cars.
Federation of Motor and Credit Companies Association of Malaysia president Datuk Tony Khor revealed that there was a “backlog” of more than 80,000 customers who have booked new vehicles for up to four months but still have not received their cars.
“So they have opted to hold onto their current vehicles. This has led to a lack of supply in the used car market.
“The demand for used cars shot up 8% in the first quarter of 2022 and the price also rose about 5% for cars less than five years of usage,” he added.
Khor said when people usually buy new cars, 60% to 67% will trade in their cars “but this is not happening”.
“The supply shortage has led to a price hike too, as demand has increased. But there is no significant price increase in the consumer market as it’s currently being absorbed by car dealers, so we are getting a lesser profit margin,” he said.
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The increased demand, Khor explained, was also due to more car dealers having gotten used to promoting their products on online platforms which has bolstered customer confidence in used cars.
“Transactions are transparent, with some sellers also providing guarantees and warranties for up to a year,” he added.
Khor said the special Employees Provident Fund (EPF) withdrawal in April has also spurred the used car market, with national carmaker Perodua and Japanese models becoming hot favourites.
“As we transition back to normal, more people are in need of their own transport and because of the pandemic, people are being careful with their spending, so purchasing a used car is seen as the better bet.”
On Sunday, Transport Minister Datuk Seri Dr Wee Ka Siong announced that the government is considering extending the sales tax exemption for the purchase of new vehicles past June 30.
Alan Cheah, country general manager of car ecommerce platform Carsome Certified Malaysia, said there was an increase in demand for used cars on their platform.
“With longer waiting periods for new cars, pre-owned cars have become an attractive option as they are more financially-viable.
“While tax exemption constitutes one of the attributed factors for customers selling their cars as they seek to buy new cars, there are a few other reasons, such as the new work-from-home routine which doesn’t require them to drive as often or own so many cars at once,” he said.
Cheah said that despite the surge in demand for used cars, Carsome did not foresee a significant increase in prices for used cars.
“A tax exemption extension will increase the supply of newer used cars in the market. This in turn, widens our already-large selection of quality-assured pre-owned cars, which allows us to continue to cater to customers’ needs.
“On the same note, if the supply of new cars continues to be delayed and customers are looking for immediate mobility solutions, they are likely to turn to the used cars to meet their needs,” he said.
According to Carsome Insights 2021, Perodua Myvi is the most preferred car model among consumers, followed by Perodua Axia and Honda City.
