Online used car websites are taking away this easy money.
The used car market in Malaysia has been having a great time since 2019. The final sales figures for 2020 is still not available but looking at the response coming from many used car dealers, it seems that the business did not slow down in 2020.
This year, 2021 might also be another bumper year as Malaysians with steady income can’t travel overseas and have extra cash available from their EPF savings.
Changing Trend
So is the used car market better moving forward? Until a few years ago, many Malaysians were afraid to buy a used car. Based on previous bad experience with shady used dealers and from word of mouth sharing issues with used car dealers, Malaysians looked at paying high prices for a brand new car and living with high monthly installments and high depreciation in the first five years to avoid the headache of repairs and bad accident damaged cars in the used car market.
Online Used Car
The situation with shady used car dealers started changing some 7-8 years ago when online used car portals entered the used car market space. These portals promised honest unbiased trading of ‘certified’ used cars and for a small fee the used car will be further examined and given a bill of health to the naïve buyer.
It worked well and more Malaysians went back to the used car market. The online used car market flourished and more websites started up bringing ‘honest’ and FREE service to buyers. No ‘football’ fees (what used car dealers charge for negotiating a used car loan) were incurred with online used car sales.
Finance officers who were approached in person would previously tell used car buyers, it is better to get the used car dealer to arrange the loan as they were ‘busy’ or ‘did not know’ the value of the car in questions or ‘the financial documents of the buyer was not good enough’.
This was a scam to force the used car buyer to go back and pay the ‘football money’ to the used car dealer which would range from RM1,200 to as high as RM1,800 for a simple Proton Persona or Perodua Myvi to a Mercedes C200 or BMW 3 Series. Part of the ‘football money’ went to the bank finance officer in charge and the rest was a processing fee for the used car dealer.
It was a great eco-system for making money and used car buyers had no choice. Why we know this….well we ourselves have been asked to pay this ‘football money’ in the past and so when we went directly to the manager of the financial institution and lodged a report, our loans were processed but as slowly as possible to make our life as difficult as possible as the used car dealer and the finance officer were both not making ‘extra’ money.
Now with the online used car portals, the same situation came about and this brought a slow death to the infamous ‘football money’.
Now we have a number of online used car portals offering an inspection on used cars and then a certificate of ‘health’ to the new buyer.
So, we have some questions now.
- How are these online used car portals making their money?
- How professional are their car evaluators?
- What qualifications do they carry to evaluate a used car?
- Are used car buyers getting the truth about their purchase?
We will look at the above four questions in another article in coming months when we get enough information from the market.
