New car prices are expected to be cheaper after the implementation of GST. Currently new cars are subjected to 10% sales and service tax but this will be replaced with GST which is just 6%. This may indirectly reduce new car prices with lower sales tax however it will be very hard to assume that new cars will be 4% cheaper after the implementation of GST. The ‘real’ lower value will probably be between 1.5 to 2% cheaper at best. For example a car costing RM100,000.00 now (pre-GST) will probably be selling for RM98k to RM98,500.00 (post GST) from April 2015.
Now when it comes to used or pre-owned cars, the same situation probably does not apply. GST will have a bad effect on the current slowing used car industry in Malaysia. At the moment used cars are NOT subjected to a Sales and Service Tax (SST) and is not a GST zero rated item.
Therefore used or pre-owned cars will be subjected to an extra 6% after the implementation of GST in early April 2015. For example a used car selling for RM100,000 now (pre-GST) will probably be selling for RM106,000.00 (post GST) from April 2015.
