Hello all.
I need some advice regarding this dilemma I am facing.

I want to buy a brand new, national made car.
But the thing is, for Malaysian made cars, the minimum loan is RM20,000 and minimum tenure is for four years.
The car costs me RM44k and I am planning to pay downpayment for RM32k.

It left me with two options :

[1] Pay downpayment (RM32k), the rest personal loan for the minimum amount of time (1 year) at an interest rate of 12%p.a

[2] Take car loan for RM20k, and the rest pay through downpayment. The repayment is set for 4years at an interest rate of 3.5%p.a



Question is, which is the lesser of two evils ?

Personal loan is certainly higher but I am only burden in debt for a year, instead of 4years if I took car financing.

Or is it better to take car loan instead ?

If so, then take personal loan. But not cheap to pay 10k for one year.

Around RM900 per month. Do you have the money?

seem like you concern is you dont want to associate yourself with debts in long period. why not you just wait for another year or two, save or invest first in PNB like ASW,ASW2020 and only then pay cash.

@epalbee3,
with my salary, I think I can cope with the repayment. But I'll have to manage my finance better and cut spending, at least for a year.

@imax80,
yes, that is exactly my concern. The thing is, I'll need the car soon, it can't wait. Had I been given the chance, I'd rather buy the car next year.

The problem i see here is you might have spent the last cents for the car.

For your information, you must have at least 3-6 months as reserve fund, if anything happens. Spending the last cent is very dangerous. If so, better get a credit card with cash advance facility. Many things can happen which needs you to spend urgent money.

Although your aim is not to take debt, but not everyone has the luxurious to do so. If it is really the case, the 2nd option might be better to get 4 years car loan..

i didnt know there's such rule of min 20k loan for national car?!

One more thing: I observe that you have spent your last cent; after that you said you are tight for one year..

are you sure you can live in this type of tight and zero financial status? I think you better take car loan. Personal loan is not worth it.

UOB contacted me few days back about 7-8%/pa personal loan, sounds fine to me.

one more thing: dun underestimate the money needed to keep your car running.. It might be RM300-600.

I am sure you cant, you will end up borrowing money/advance salary request/request more money from parents just to meet ends need.

come back when you can say " I am certainly can!"

This post has been edited by ah_suknat: Jan 18 2010, 10:08 PM

You are not sure as ah-suknat pointed out, so it is a risky movement and leave no room for error.

For cashflow management car loan will be more comfortable, but longer duration means more interest to be paid. Surviving is about cashflow management as well. No cash cannot survive.

If you need a car for transport, why must buy a 44K brand new car

Cannot settle for second hand car that match your existing cash you have?
Cannot settle for brand new Perodua smaller car?

By then, don't need to take loan if loan does concern you a lot.

All problem solve by then.

Most major banks in Malaysia do impose such rulings.
The logic behind it is that they want to impose a higher % of interest,
and since the price of local cars are cheaper than overseas cars, they'd lose out
if they provide loans which can be settled earlier.

I suggest u take car loan...with 8 % interest differnt ( compare 12 % and 3.2 %). With current economy....all investor also pull back, they not doing this for fun....with their reason of course..simply because ppl feel it is good to hold cash on hand is safer than u do any transaction.

U can take loan with 3.2 % with 4 years...if u 1 year later u call bank and tell them...wat is your great price u can give me if i give u full settlement cash ?? u think they will still hold u till 4 year ?

I bet u, they will call u back and give u a good price.

Conclusion : take car loan....if u have cash on hand...call bank and ask for price for full settlement. u save alot interest from here.

44k i suggest u buy 2nd hand vios also better than national car.

Take a car loan. It doesn't matter if you have debt for 4 years. Low interest loans are fine. They are the way to go actually. Negative leveraging - done correctly, will benefit you.