Oh yeah,
after doing some spreadsheet, i found that my FD interest reducing every months as my principle drops after repayments,
while the loan interest remains the same until the end of the tenure, although i paid most of the amount owed in the 5th year.

it ended up my FD interest over the 5 years are about 3.1k, while the loan interest itself is 4k++!

Here is my calculation on buying with Cash or take loan

But am using 50k example for easy calculation

Cash scenario
50k nett nett for the car

Now is comparison between putting 50k into FD at 4% per annum and taking a loan 2.9% per annum for 7 years

If you take 2.9% for 7 years based on 50k loan amount (Let's say it is 100% financing)

RM 1450 interest per year x 7 years = 10150

Total principal + interest = 60150

Total monthly commitment is 716.07
Total payable month = 7 x 12 = 84 months

Now if that 50k is slotted into FD with 4% per annum, and withdrawing 716.07 a mth for installment

Using Time Value Money
Present Value = 50,000 ( Means deposit 50k into FD)
Payment = -716.07 (Withdrawing every month for installment
Future Value = 0 (Complete withdrawal to pay hire purchase)

Annual Rate = 4% (FD 4% interest payment to you)

Mode = Beginning (Hire purchase pay in the start of the month, so withdraw on starting of the month)

In the end, calculate Period that can withdraw until Future Value = 0 (Means complete withdraw)
Period = 79.31, or 79 months

So.. means if u take loan, and money put FD.. u are still losing out 5 mths of installment
5 months x RM 716.07 = rm 3580.35

So u still pay extra RM 3580
However, this is based on theory and calculation.
Real situation, bank doesn't allow partial withdrawal of FD of RM 716.07, and many more kuci kuci twist and turn..

Do be informed that if you take hire purchase, need to sign facilities agreement, stamping and preparation also cost approx 1k.
Just my 2 cents calculation to justify cash purchase and putting in FD and take loan.

*** I hope my TVM calculation input data is right ** Hahaha.. cuz i am only 4/5 bucket water

I didnt calculate but should be inclusive of 4% interest gain yearly from your FD principal.

ok..

this scenario, we must talk about the buyer got 50k cash, but yet want to take loan to buy a car with loan principal 50k.

So to work out the calculation.. we must define the monthly payment of the hire purchase loan..
It works out to be paying RM 716 for a period of 84 months (for this case of 7 years)
So if we want to see whether charging up the FD with 50k cash without any other external fund, will this set up be able to clear the hire purchase or not.

So that is why we start out with 50k place in FD.. say 4% per annum.

So ur hire purchase need to pay every month.. hence u need to withdraw RM 716 from ur FD to pay the hire purchase.

While ur principal will earn 4% interest.. ur principal will keep reducing because u are cashing it out every month to service ur Hire Purchase.

So.. based on the action of withdrawing RM 716 every month, you can withdraw 79 times to tahan 79 months of hire purchase.

But u must remember, u took a loan for 84 months..
So there is a 5mths period where you will have no more fund in the FD acc.

How I derive 79 months is from the calculation using Financial Calculator with the info provided.

Present Value = 50k (U put FD ma...)
Payment = - 716 ( minus, because u withdraw money out)
Future value = 0 (Because u keep withdraw until finish to pay the hire purchase.. so future will be 0)
Interest = 4% ( FD acc give your principal 4% P.A)

So you calculate period..

So period = 79.xx, or 79 months

That is how i get 79