Malaysia is located just above the country that has one of most expensive properties prices and earns one of the top per capita incomes in the world. Malaysians always hear complaints from Singaporeans about how expensive it is for them to own a car, even though these same people are enjoying household incomes of USD7000 to USD9000.
To own a car in Singapore, you need to bid for a CoE in the respective categories, and the bidding only happens from the 1st to 7th of each month. 50% of the bidding amount will be deducted immediately from your account as a tender deposit. Once the bidding is successful, you will need to pay a quota premium besides other expenses including taxes, insurance, etc.
Many Malaysians feel sorry for their neighbours, the Singaporeans; some Malaysians might even feel proud that they can own a car with a mere USD150 monthly installment!
But now, reality sets in following news published by The Edge and other media, based on a report published online by Jalopnik, that Malaysians are not very far behind Singaporeans with regards to vehicle ownership cost. According to the report, which benchmarks the same model in different countries across the world, Malaysia is the second most expensive place to buy a car after Singapore.
The Vice President of Federation of Malaysian Consumer Association (FOMCA), K Koris Atan, rationalises that the high cost of vehicles in Singapore is understandable for the benefits of the environment and the public. The country is after all well-equipped with convenient and advanced public transport. However, high taxes in Malaysia is not used to discourage car ownership, but as a source of income for the government at the same time to protect the government linked car brands in Malaysia. Despite the fact that high taxes help the government to offset the cost of petrol and diesel subsidy, Malaysia is not listed under the top 10 cheapest petrol country in the world as per the list published by This Is Money financial website.
Recently, the government of Malaysia is talking about gradually reducing car prices by 20% to 30% until 2017. This has brought up several controversial issues – some suggested cutting excise duty as a good and impactful strategy, some worry about the secondhand car industry being hampered negatively. As of today, the question still remains as to how the government is going to carry that out.
Before the May 2013 General Election, Malaysia’s Prime Minister promised that the reduction of car price will definitely be granted despite the announcement in 2012 about there being no plans to reduce the excise duty as it would impact the used car market. According to JF Apex Security, the government is likely to take some time to consider the whole automotive ecosystem by carrying out some feasibility studies. It will be some time before Malaysia can climb down the ranks as having the second most expensive car prices in the world. After all that’s said and done, the Malaysian government still needs to make sure that the local car brands continue to flourish.
Meanwhile, for all Malaysians, enjoy the fact that you can still own a car with just USD150 monthly installment, even though you have to pay double to own an imported car compared to your other neighbour, Thailand. One final consolation – you are not alone. Your neighbour located west of Malaysia, Indonesia, was ranked number 3 in same list.