With the implementation of Goods and Services Tax (GST) by April next year, the Malaysian Automotive Institute (MAI) expects vehicles prices to be reduced by between 1 to 3% on average, reports Bernama.
According to MAI’s Chief Executive Officer M. Madani Sahari, the proposed GST rate of 6% is lower than the current Sales and Service Tax (SST) at 10% , the reduced price will also depend on the value determined by the original equipment engineers (OEM).
“Our target for the total industry volume (TIV) next year is 700,000 units as car prices will be more competitive. As for this year, we are forecasting a TIV of 670,000 units,” said in M. Madani Sahari in a statement.
Madani however, urged consumers to continue purchasing vehicles this year because there is no point in not purchasing them before the GST implementation, which he said will have a minimal impact on new vehicle prices.
Cars depreciated in value by 10% every year and the difference in value between the cars purchased this year and next year will be incremental. For example, if you’re buying a car valued RM50,000 this year, next year the value will drop to RM45,000. However, the value decrease in price is only 1 to 3% so you will better off selling your cars than buying new ones this year.
The value of second hand cars, however, is expected to drop more, by an average of between five to 10% per annum.
