There will be an increased number of used car listings coming into the market in January 2022.
This December 31st (2021) the car finance moratorium will end. So far there has been no news of an extension from the Ministry Of Finance and all the banks that do high car loans are waiting to start collecting on the long due payments from many Malaysian car loan borrowers who have been holding back their monthly car payments.
Yes, this ‘grace period’ has allowed many to ‘move around’ their finances to stay ahead of our slow-moving economy. Some others have managed to get back into employment or an upturn in their business for better days ahead. These are the car owners who will be able to start making their car loan payments this January 2022.
However, there are still many others, especially small and medium business owners who have not been able to recover from the business downturn of Covid-19 and they will be forced to sell their ‘nice’ cars to cover their outstanding loan payments.
Here is where we will see a large number of 2 to 4-year-old luxury vehicles being pushed in the used car market and dealers and also buyers will not take up high prices.
We have already seen similar aged and type vehicles appearing in the online classifieds, on sale by owners seeking to ‘just cover’ their loan amounts. With ‘younger cars’ the loan amounts will definitely be higher than the depreciated prices and owners will not be able to cover the remaining amount owed to their bank or finance company.
Used car dealers will also not take in these cars for high prices as they might need to ‘hold’ these used cars for months before making some money.
This means, it will be a buyer’s market and sellers might be forced to take a loss plus being sued by their finance companies for the remaining loan amount.
This biggest hit segment will be the plug-in hybrid vehicles. Yes, they were the best selling at launch due to their attractive (lower-taxed prices) and attractive financing plans from the sellers who managed to persuade Japanese and Korean car owners to move up to their brands.
Now, their values are falling as after sales and reliability issues keep rising. This can clearly be seen with the many Facebook owner’s pages for all the brands where current owners shared the ever-increasing issues with the complicated electronics that work around the battery and charging system.
Adding to the problem is the many PHEV owners who NEVER charge their cars as they do not have charging facility at many condominiums and even landed homes and they do not realize that all PHEV’s need to be charged regularly as the battery works around the cars eco-system.
Just driving with the petrol engine and using the battery to ‘add’ acceleration when needed is all that counts in the early months of ownership.
So, watch also for the many PHEV’s that will be coming into our used car market and their prices might be ‘interesting’ but it might be a big maintenance issue in coming months for the new owner.
