No GST – this is the best time to buy a new car, right?
If you’ve gone into the showroom and found the car you want is out of stock – and there’ll be none until after September – here are five strategies to consider if you’re still determined to pay less for your new car in 2018.
1. Consider other models, visit other dealerships
The retail price and discounts advertised are not final. Different dealers have different margins and some can afford to be more generous with how much more they can take off so until you’re in the showroom and talking to a sales person, there’s no way of knowing the final, absolutely lowest price they are willing to go down to.
Pick an alternative model or two which are still in stock – margins also differ from model to model – (be realistic, you won’t get a BMW 7 Series for the price of a 318) and go to more than one dealer network. A more aggressive seller may well be able to offer you a price close enough to what you’re willing to pay because they want to clear stocks and there are sales quotas to be met – even in these massive sell-off times.
Also, ask about any promotional discounts they may be giving to members of selected professional bodies or special interest groups, employees of certain companies.
2. Alternative (legal) financial instruments
It may seem impossible to bridge the gap between your budget and the sales person’s rock-bottom price, but consider it from a different perspective: how much you can afford to pay every month, assuming your new joy will be funded with the aid of a financial institution then you actually have a lot more wiggle room.
Depending on the financial instrument, you could end up paying less every month on your instalments or get more car for the same amount.
Some car companies offer extremely low interest rates because they have tied-up with a bank or building society. Volvo is offering 0.9% on one of their models with a service package thrown in, Volkswagen 0.88% on certain models. Compare that against 3.18% t0 3.4%, the current bank rate, spread over 5 years. There may also be promotional deals for members of selected organisations or professional bodies and employees of certain companies.
Car companies like BMW/Mini, Porsche and Mercedes-Benz are licensed to offer financial services – loans as well as insurance – which enables them to create their own ownership packages like leasing programmes with guaranteed values at the end of the loan tenure. They also have the flexibility to tailor packages with monthly instalments considerably lower than the repayments to a bank. At one point (regretfully we are no longer able to find the webpage to confirm if this is still the case), the monthly repayments on a C200 saloon bought under Mercedes’s Agility financing was 40% less than under regular HP. That is not a typo, 40%.
3. Leasing instead of buying
A novel notion for Malaysians but the concept is gaining popularity largely for the convenience it offers. The all-inclusive cost every month also covers insurance, road tax, service and maintenance with the assurance of trading it in for a brand new car every few years, according to the lease agreement. Some leasing plans don’t require the minimum 10% downpayment.
Post-31st August 2018
Try, try, but there is nothing that you like and can afford that can be delivered before the reintroduction of sales and service tax.
Chin up! It’s not over yet.
All dealers have the same dread – a stockyard full of new cars and no buyers. Just as the manufacturers couldn’t just add a shift to build more cars before the end of August to meet the sales tsunami, so they can’t shut down production once the GST-free period is over either. There’s a workforce and those pre-ordered CKD kits still need to be assembled and the cars sold.
Throw in the pressure that in three months the cars will be a year old with the instant depreciation and some might call it the perfect storm for a massive end of year car sales slump. As a buyer, you have a situation that is to your advantage.
4. Wait for the inevitable year-end stock clearance deals
Dealers will have to match the GST-free prices to clear their 2018 stock so be patient and get what you want instead of panic-buying and taking what there is. Sit back, find out what others paid for their new cars and use that to get an idea of the sort of reductions to expect.
5. Bulk Discount
Wholesale buyers always get a better price than an individual. We’re not suggesting you buy up a whole dealership to get your fair-priced car. Fortunately, two cars qualifies most buyers for a fleet rate. Your buying partner could be anyone who happens to want to buy a car of the same marque – your sibling, a co-worker, even a random person you met at the teh tarik stall. You don’t have to buy identical models either. The other purchaser(s) just have to be committed to go through with the purchase or you won’t qualify for the discounted prices you negotiated.
Please note neither this article or this publication is sponsored by any of the car companies or financial institutions mentioned above.