Second Hand Car Interest Rate Malaysia in 2024
A second-hand car is a used car that has been previously owned by another car owner before being passed on to a new owner. Generally, it is not a new car.
Every car has its own depreciation value, which means the price of the car will be cheaper over the years.
And because of that, most people who buy second-hand cars do so because they can afford the car at a cheaper price than a new car.
Thus, any buyer who intends to buy a second-hand car needs to follow some guidelines to purchase it so that they can get the car at a cheaper price in good condition.
How To Apply Second Hand Car Interest Rate Malaysia
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One of the life commitments for all people, as part of their needs, is buying a car. Every aspect needs to be considered before purchasing a car.
One of them that needs to be looked into is the interest rate imposed on second-hand car buyers.
Below are the ways to apply for a car loan malaysia for a used car;
1. Find The Best Second Hand Car For You
Before applying for a car loan malaysia, the buyer needs to find the best second-hand car that suits their preferences and needs.
The buyer needs to make sure that they can afford the car and pay the monthly installment without any arrears, while at the same time bearing the maintenance costs in the future.
Thus, buyers need to refer the loan interest once they are determined to afford the best second-hand car that they choose.
2. Choose Between Fixed Rate or Variable Used Car Loan
The interest rate on the second-hand car is usually higher than the interest rate imposed on the new car.
The buyer can choose either to implement fixed or variable interest rates on their second-hand car purchased.
After all, it depends on the budget or financial situation of the buyer and the bank that the buyer chooses to make the car loan with.
3. Choose The Best Second Hand Car Loan Interest Rate Malaysia
Buyers need to do some research to choose the bank institutions that offer the best second-hand car loan with the lowest interest rate.
Typically, the common hire purchase interest rate imposed on the second-hand car is between 4.0 and 4.5 percent in most cases and is entitled to be paid by the buyer.
For example, Affin Bank is one of the bank institutions that offers the lowest interest rates on second-hand cars, which are between 2.92% and 3% per year.
However, the buyer can refer to any other bank institution that offers the best second hand car loan interest rate before going into the sale and purchase agreement and make comparisons between all of those.
4. Prepare The Document Before Apply Used Car Loan
Once the buyer agrees with the interest rate loan imposed by the bank, which suits their financial state, they can start to prepare the necessary documents needed by the bank.
This is the significant part that needs to be fulfilled by the buyer so that their loan application is approved.
For instance, a copy of the identity card of the car owner, a copy of the vehicle ownership certificate (VOC), a copy of the payslip, and many more are required by the banking institution in order to approve the loan application.
5. Send The Document To The Bank
For the last stage, the buyer (the applicant) needs to send the documents to the bank once the preparation of the documents is complete.
All those documents will be processed by the bank depending on the financial records of the car buyer in terms of CCRIS, CTOS, and other loan applications.
Thus, the application will be approved by the bank once they consider all the potential factors that made the buyers eligible to apply for the car loan.
Second Hand Interest Rate (Best Offer From Bank)
Below is the list of the banking institution that offered the second-hand car loan and its interest rate;
| BANKING INSTITUTIONS | INTEREST RATES | |
| NEW CAR | USED CAR | |
| Affin Bank | 2.92% | 3.00% |
| RHB Bank | 3.18% | Unavailable |
| CIMB Bank | 3.755% | 4.45% |
| Public Bank | 3.31% | 4.1% |
| AmBank | 3.05% | 3.66% |
| BSN | 3.00 | 3.80% |
| Bank Islam | 2.35% | Unavailable |
| Maybank | 3.40% | 4.25% |
| Hong Leong Bank | 3.24% | 3.78% |
| Bank Muamalat | 2.95% | Unavailable |
Benefits Second Hand Car vs New Car
The biggest dilemma for all car buyers is that they all have the option to buy new cars or to afford a second-hand car.
Most people who do not have any financial issues will probably choose to buy a new car, which is a factory-fresh vehicle that belongs to nobody.
Meanwhile, there are some groups of car buyers swayed by the offers of used cars.
However, any decisions made by car buyers mostly depend on their preferences, needs, and financial state.
Generally, both second-hand and new cars provide benefits to the car buyers, as the truth is, there is no right or wrong answer to any decision made by the car buyers either to purchase a new car or a second-hand car.
Apart from that, there are several distinct differences between them. The obvious benefit that the car buyer who chooses to purchase the new car has is that they are the first owner of the car.
The new car owner will receive a full manufacturer warranty, such as free initial services, that will create certainty for the car buyers in terms of the safety of the car, even if they are involved in a car incident or any malfunction of the car within the warranty period.
The biggest benefit when acquiring a new car is that buyers will not be surprised by any hidden damage or pitfalls on the cars created by past owners.
In addition, for most new cars, the manufacturer offers the car buyer the latest technology and safety equipment, which is more advanced than a used car.
However, to keep in mind before sealing the deal, the car buyers who intend to purchase the new car need to know that the cost of the car is higher than that of the used car.
In spite of that, car buyers can choose to afford a second-hand car, as it has its own benefits.
The biggest significant benefit of purchasing a second-hand car is that the buyer may acquire the car at a cheaper price.
If finances are the main concern of car buyers, a second-hand car would be the solution. This is because the second-hand car will depreciate over the years.
Other than that, the buyer does not need to worry about having to pay unnecessary fees, such as service fees. That’s why a used car is cheaper.
In a nutshell, car buyers need to know their needs and preferences before they seal the deal with the car seller to purchase the car.
They can choose either a new car or a second-hand car, as both offer their own benefits.
How To Get Approved used Car Financing Interest Rate
Only if the application for a car loan is approved when all the eligible requirements are fulfilled.
Below are the requirements that need to be satisfied by all applicants to gain car loan approval;
(i) Good Credit Score
The biggest significant factor that the bank institutions take into account when a car loan application is submitted is the credit score of the car buyer (applicant).
The chances for the loan application to be approved are high if the applicant has a good credit record. This means the applicant is able to pay the monthly installment and their debt accordingly without any arrears that might create a bad record.
Thus, a good credit score history will make it easier for the bank institution to approve the application.
(ii) Find a Guarantor If Credit Score Low
If the car buyer has a problem with their credit score, which is low or weak, they may find a guarantor to strengthen the car loan application so that it can be approved.
The guarantor must be someone who is close with the buyer (applicant) and has a good credit score to act on behalf of the applicant if the applicant has any problems with their loan installment.
Therefore, it is crucial to guarantee the banking institution in order to approve the car loan.
(iii) Afford To Buy That Car
Before making any car loan application, the car buyer needs to know their capability to afford the car.
They need to know their monthly commitment before they decide to do so.
The bank will also consider the capability of the buyer (applicant) to pay their monthly installment by looking at the applicant’s monthly commitment, expenses, and income.
Hence, the buyer who intends to apply for the car loan needs to know whether or not they can afford to purchase that car.
(iv) Send The Application At All Bank in One Time
Last but not least, every banking institution has its own requirements that the car buyer (loan applicant) must fulfill in order for them to approve the loan application.
So, the applicant may choose to send the car loan application to all banks at once.
Any loan application that fits with a banking institution’s terms and conditions will be approved as soon as possible.
Thus, this is one way to ensure the loan application is approved.
List Document To Prepare Before Apply Second Hand Car Loan Interest Rate Malaysia
Every banking institution in Malaysia will require the car buyer to provide a list of documents that need to be prepared and sent to them for the secondhand car to be approved.
Every individual applicant is entitled to provide a list of documents based on their categories of applicants.
Below is the list of documents that need to be sent out to the bank according to the below categories of applicants;
| CATEGORIES | LIST |
|---|---|
| Self-employed | A copy of valid Malaysian IC (for Malaysians) & driving license of the car owner. A copy of latest six months bank statement of the loan applicant. A copy of Company Registration (SSM) certificate. |
| Government servant | A copy of valid Malaysian IC (for Malaysians) & driving license of the car owner. A copy of latest three months’ pay slips. A copy of latest bank statement of the loan applicant. |
| Private sector employees | A copy of valid Malaysian IC (for Malaysians) & driving license of the car owner. A copy of latest three months’ pay slips. A copy of EPF or bank statement of the loan applicant. |