conclusion:

A ) buy a bmw with 1.38% interest rate
or
B) take a car loan and put your money in ASB

.......
If you take the loan instead of paying cash and used the money instead to  put your cash in FD @ 4% p.a. = you are a sor hai!

If you take the loan instead of paying cash and used the money instead to  put into real investment and say get 10% p.a = you are a W1NN4R!

Understand?

Xuzen

tumpang topic ,

If i put 100k down payment for a 150k car . will i kena check? i have the cash but my pay slip wont approve for the installment of 150k so i reduce it to 50k loan .
thinking to cash 150k straight but worry LHDN will come . My bank statement can proof my Transaction but is not making sense with what my job income currently cox is not frm my company and i not doing any business . 

The rule is simple:

If you can proof that your money comes from a legit source e.g., you kena TOTO/ Magnum or your mummy or daddy sold their house and gave you the money etc, then it is perfectly alright.

If for example you work as a pizza delivery boy with a salary of RM 900/mth and without any other source of income then it will be a problem.

It is all about relativity.

Xuzen

Bank account acceptable or not?
I do not have payslip but they straight bank in into my account.

tumpang topic ,

If i put 100k down payment for a 150k car . will i kena check? i have the cash but my pay slip wont approve for the installment of 150k so i reduce it to 50k loan .
thinking to cash 150k straight but worry LHDN will come . My bank statement can proof my Transaction but is not making sense with what my job income currently cox is not frm my company and i not doing any business . 

If got money to buy by cash... why not?
why want to pay the interest to the bank?

tumpang topic ,

If i put 100k down payment for a 150k car . will i kena check? i have the cash but my pay slip wont approve for the installment of 150k so i reduce it to 50k loan .
thinking to cash 150k straight but worry LHDN will come . My bank statement can proof my Transaction but is not making sense with what my job income currently cox is not frm my company and i not doing any business . 

Ok so I've read back 2 3 pages back and understand on the whole hoo haa between FD 4% and the 2.5% flat rate.

Does anyone have a formula to calculate the minimum % for this to actually works?

Let's say 100k loan 5 years @2.5%. How much of ROI to make me actually not pay  full for the car?

Ok so I've read back 2 3 pages back and understand on the whole hoo haa between FD 4% and the 2.5% flat rate.

Does anyone have a formula to calculate the minimum % for this to actually works?

Let's say 100k loan 5 years @2.5%. How much of ROI to make me actually not pay  full for the car?

Non finance trained people will find it very hard to grasp the concept of Time Value of Money.

let me explain:

Lets say I put RM100K in a 12 mth period FD at 5% p.a, one year later my profit is RM 5,000 and a ROI of 5%. Yay! Happy right?

Then If I withdraw it out and do nothing... in the second year the annualised return becomes (5)^(1/2) = 2.24% p.a. but the profit still remain 5%.

3 years later, the ROI is still 5% but now the annualised return is  (5)^(1/3) = 1.71% p.a.

4 years later, the ROI is still 5% but now the annualised return is (5)^(1/4) = 1.5% p.a.

So you see, in real finance, we take in the concept of time and the cost of doing nothing is factored in.... hence we say Time is Money, we really mean it... mathematically!

So, if you put in FD and wait and time the market.... you will lose your annualised return (we called it Internal Rate of Return, symbol is xIRR).

Back to the question of taking a HP versus buying cash.

Usually, HP interest rate of 2.8% to 3% when converted to effective interest rate (aka Time Value of Money concept) will be around 5.0% p.a. (xIRR)

If you take the loan instead of paying cash and used the money instead to  put your cash in FD @ 4% p.a. = you are a sor hai!

If you take the loan instead of paying cash and used the money instead to  put into real investment and say get 10% p.a = you are a W1NN4R!

Understand?

Xuzen