Malaysiaminilover

Author: Angelina Soul

  • Refinance car loan for a home

    Lately, we received an email from Nong Min who is currently paying 10,000 baht (roughly US$318) for her monthly car payment. Nong Min would like to buy a house for herself but she is facing some difficulty to obtain a new home loan because the monthly car payment has taken up nearly 1/3 of her monthly income. At the same time, she doesn’t have much savings to pay the down payment for the house. She is seeking for some advices after reading one of our previous articles “Refinancing car loans into home loan”. Now here is some of the calculation we do for her.

    In Thailand, if you are having one loan that has taken up 1/3 or more than 1/3 of your monthly income, you will have some difficulty in getting another loan. However, you can play a little trick in order to get both things you want at the same time as long as the income is stable and going to be stable for long.

    • Monthly salary: 38,000 baht ($1200)
    • Monthly car payment: 10,000 baht ($318)
    • Remaining car loan: 240,000 baht (24 months)
    • Current car value: 650,000 baht
    • Savings: 50,000 baht
    • House value: 1.6 million baht
    • Down payment needed: 16,000 baht

    Base on the current car market value, Nong Min can refinance her car and get 650,000 – 240,000 = 410,000 baht cash. She can pay 400,000 baht for the house down payment and save the 10,000 baht into her savings for emergency purposes. With 400,000 baht down payment, the bank is now considering giving her the credit. As for the car, it is easier to refinance at the maximum of 9 years. Now the refinance goes like this.

    • New monthly car payment: 650,000 @ 3% @ 9 years = 7,643 baht
    • House loan monthly payment: 1.2 million baht @ 5% @ 30 years = 6,450 baht
    • Remaining savings: 60,000

    Base on the new calculation above, Nong Min now has a total monthly payment at 14,093 baht, which is just slightly over 1/3 of her monthly income at the acceptable range. She can now own both house and car at the same time. In this case, the car loan should go as many years as you can because the interest rate is only 3% while the housing loan is 5%. Other than that, what you should be well prepared is a minimum of six months stable salary income statement, six months permanent address, as well as good credit scores.

  • What is unregistered cars and what is recon cars?

    Most of the first time car buyer or inexperience buyer must have come across “unregistered car for sale” when searching for the dream car. Often, these cars tend to have attractive price and it is usually lower then new car price. What does unregistered really means and why the price is lower than new car?

    Unregistered car is cars import from foreign countries and haven’t register at transportation department (JPJ) because these cars are waiting for its new owner. These cars could be new but at 99% they are all used cars from foreign countries. Sometimes or at most of the time, the advertisement will state the year make of the car like “2010 Unregistered Mini Cooper for sale”. In other words, these cars are reconditioned or used from foreign countries.

    Majority of the unregistered cars or recon car will not have 0 miles or less than 50 miles on the odometer because they are not brand new. They have been used in foreign countries by someone. This also explains that why these cars are cheaper than brand new car. In some car ads, you can even still see the foreign registration plate on the car. A 2010 reconditioned Mini Cooper may cost few thousands up to few ten thousands cheaper than the new one.

    Some consumers prefer to go for reconditioned car because it is cheaper. However, if you are unlucky, you may end up paying more for the car because spare parts replacement isn’t cheap. There are parts need to be replaced after few ten thousand miles has been put on a car engine.

    What is recon car?

    A car may be brought in to the country using AP (Approved Permit), student AP, working AP, foreign AP, or other kind of permits. Some of these permits are tax free. Therefore, the profit is quite high for used car dealers who are able to obtain these permits.

    With these permits, car dealers import some used cars from foreign countries, get them clean up and replace some necessary parts, and sell it as reconditioned cars or recon cars. Nevertheless, you will never see an advertisement tell you that “this is a reconditioned car” rather than “this is unregistered car”. In fact, they are all used cars. Reconditioned is just a better word to listen and sound more comfortable for buyer.

    Some car dealers will advertise their car like “03/09 Mercedes Benz SLK for sale”. This means the car is made in year 2003 and it has been import to the country and registered at 2009. Other than that, 2009/2011 means the car is made in 2009 but registered in 2011.

    In conclusion, whether you would like to pay less for a car with few thousands or few ten thousand miles on the odometer or you would like to pay more for a brand new car with brand new smell, the calculation still have to base on your own calculator. If your choice is recon cars, make sure you have followed all the steps to buy a used car or bring a trustable mechanic to inspect the car for you.

    AP, AP, Approved Permit. Permit is something has been approved and why still call it Approved Permit?

  • What is “Kereta Sambung Bayar” and what are the risks of buying these cars?

    “Kereta Sambung Bayar” (cars continue to pay or continue to loan the car) has gained more popular in recent years in Malaysia and some other countries. This is because more and more people are unable to pay off their credit card debt, mortgage loan, and some other loans and causing them get blacklisted in central bank. People who are blacklisted or bankrupt are not able to obtain any new or used car loan from bank. Hence, there is “Kereta Sambung Bayar”.

    What is actually “Kereta Sambung Bayar” means? It is a term to describe a car on sale but the buyer is not require to obtain any new car loan. The buyer can continue to pay the car loan. The car will belong to the buyer until the loan is fully paid off. This has sounded very attractive especially for people who are unable to get any car loan but they urgently need a car.

    How it works?

    When someone is no longer able to pay their car loan, there are some dealers will take over these cars and put it on sale with the “Sambung Bayar” title. Some of these cars are obliged to few months’ late payment while some are cars going for auction soon. Dealers target on foreign students, foreign resident, buyer with bankruptcy, or blacklisted in CCRIS (Central Credit Reference Information System). Other than that, buyers with good credit score but currently having too much of loans are also targeted. This is because they are hardly obtaining a new loan for cars.

    The process is quite simple and straight-forward. Buyer will only have to pay a down payment or deposit base on the car they want and prepare these documents:

    • Photocopy of their Identity card (IC)
    • Most recent 3 months pay-slip or income statement

    Surprise? That is, that is the only few documents you need in order to drive a car home.

    What are the risks of buying these cars?

    There are many car dealers specializing in Kereta Sambung Bayar because the profit margin is optimism. Buyer will have to start pay for the car loan once he agreed to buy the car. However, the ownership and the debtor are still belong to the person who is unable to pay the car. The new buyer just gets the car and pays the monthly payment. The ownership of the car will only transfer right after the loan is fully paid off. It has got nothing different with those who purchase a new car from any car dealer because the ownership of the car is belong to the creditors or banks and it will only transfer to the buyer once the loan is fully paid off. Although there is a black and white document signed between seller and buyer and witnesses by car dealer, the risk is still there.

    • Is the document legalized?
    • Is the document having enough information? Is it complete with all the terms and condition?
    • What if the previous owner dies during the period of time?

    People are consistently having the attitude towards cheap used cars. Majority of first time car buyer have wrong thoughts which they think these kinds of cars are cheaper than market price which apparently are not. Look through the market, most of the “Sambung Bayar” car require higher deposit or higher down payment if you compared with a normal used car. This is because the previous owner has been dragged the monthly car payment for months and the new buyer will have to help him clear that before he able to continue the car loan. Moreover, these cars did not clearly state the exact amount remaining in loan. Check properly before you going to make your decision.

    If you are not having bad credit, bankruptcy, blacklisted, what is the point of going for cars continue to pay? In a nutshell, the whole deal is people who is bankrupt/blacklisted purchase a car from people who going to bankrupt or blacklisted because they are no longer able to pay off the car loan.

  • Steps to buy a used car

    There are steps to know when buying a used car either from private seller or direct owner. With the help of technology, many car owners can now direct upload their advertisement to the internet with little cost or totally free. This has bring a lots of freedom for shoppers to direct purchase a used car from owner without have to pay extra cost for used car dealer’s profit.

    However, when there is expediency, there is difficulty. Scams could be happened when an advertising company neglects to filter out the scams advertisement. Therefore, here are some steps to follow when buying a car either from private seller or used car dealer.

    Step 1 Get a vehicle report of the car

    Once you have known which car you would like to purchase, you can easily get a vehicle history reports from either CARFAX or Autocheck through internet. These reports are less than $30 dollars but it buys you a certainty. It tells you the title information of the car (normal, salvage, or junk), accident history, lemon history, number of owners, or any flood damage history. All these information are worth for just $30 dollars.

    Step 2 Check out the car

    Three don’t, don’t have a hungry stomach when viewing the car, don’t view the car at night time, and don’t go with empty hands. Here are few things to check:

    Car body: Look carefully each of every part of the car body and see if there is any dented part. A car that had any accident before will not have smooth texture. This is because some car paint shops just restore the car with some cheap skills like knocking or using suction cups to restore dented area, and then paint the same color. You should also check the car color whether it is consistent. Inconsistent body color means some part has been fixed before. Alternatively, you can also use a small piece of magnet to see if the car body has a major repair before. If there is any part that the magnet doesn’t stick, it means that part has been repaired with non-magnetic material like filler.

    Car engine: Open the car hood, pull out the dipstick and see if the engine oil is at the right level. If it is not, it means the owner did not really maintain the car well. See also if there is any oil leaking around the engine. For example, transmission oil, engine oil, coolant, or brake oil. Not to forget to check the engine number, it must match with the document. Other than that, check if there are any broken parts like cracked hoses.

    Car body/chassis number: Check the VIN number. VIN (Vehicle Identification Number) must be match with the document, CARFAX report or grant.

    Windshield: Often windshield look like nothing wrong in a good tinted. Check properly to see if there is any cracked or small hole at every piece of glass on the car.

    Car wheels and tires: Common sense will tell you if it is a new tire. Check each wheel and see if there is any unbalance. If one tire looks newer than another, that literally means the alignment and balancing of the car is not in good condition. You can use a ruler or a coin to check the tire thread.

    Car interior: Bad car that always park under sunlight or under rain will not have a nice smooth dashboard. Check the dashboard color and also check if there is any fracture on it. Check also if all the lights and electronics are working in proper condition.

    Car carpet: Most of the people overlook this especially when buying an older car like 1999 or earlier car. Remove the carpet and see if there is any hole underneath, if there yes, give up the car. See also if the carpet is still in good form. A few pieces of car carpet or floor mat could cost up to 100 dollars.

    To get into more details, see what to check when buying used cars.

    Step 3 Time to test drive

    Do not feel pity to the car while you test drive. Try running it up to 80-100 km/h and feeling if there is any shaking or weird sound. See some of the symptoms of worn automatic transmission here. Do not give too much of love to the car by driving 20-30 km/h but we did not advice you to rape it over 100 km/h too. After been driving for a while, stop the car and open the car hood with the engine running. Don’t touch anything with your own hand and just try to smell if there is any burning or smoke or check for splattered oil.

    Step 4 Make a down payment or deposit

    Ask the same thing in three different shops will not waste your money. Try to look for other seller with the same model of car you want before making your decision. Once you have made your decision, you need car bill of sale. Write down all the promises clearly in the bill of sale and the selling amount. The down payment shouldn’t be too much and it should be around 1-3% of the car amount. This is because you will still have to bring the car for inspection. What if the inspection failed and the owner not willing to return the deposit to you?

    Step 5 Bringing the car for inspection

    This is depending on buyer and seller. Some buyer does not prefer to pay any deposit or down payment until they confirmed the car is clean and able to transfer the ownership. In this case, buyer and seller will have to bring the car go to inspection together. If the seller trusts the buyer, the buyer can bring the car for inspection alone. In Malaysia, it is a must to inspect the car at Puspakom before you can transfer the ownership of any vehicle.

    Step 6 Transfer of ownership

    Now the inspection is done and you have confirmed that the car is ready to transfer the ownership, you can pay the balance to the seller and transfer the ownership. If you are getting a car loan, you will have to wait until the loan is approved and the money is transferred to the owner, and then only transfer the ownership of the car. Happy dealing!

  • Most expensive exotic car crash made up by eight Ferraris, a Lamborghini, and three Mercedes

    People who love cars must step into Japan once in a life time for sure to see all the exotic cars and how car enthusiasts rape their cars. Yesterday, 14 exotic cars destroyed and crashed in Japan motorway pileup, marking the most expensive exotic car crash in history with eight Ferraris, a Lamborghini, three Mercedez-Benz, a Toyota Prius, and possible a Nissan Skyline. The estimated total cost involved in the crash worth more than a million dollar.

    In Japan, most of the Ferrari cost more than US$100,000 except older Ferrari 550 Maranello or Ferrari Testarossa. With eight Ferraris crash together, the combined value is already more than a million dollar excluding the Lamborghini and three Mercedes. Base on the pictures we can see from AP and video from NTV, some of the Ferraris can said to have total loss. The amount for the damage is yet uncountable.

    How could this happen? The exotic drivers were actually heading to Kyushu from Hiroshima and this was supposed to be a perfect exotic car convey. However, one of the Ferrari drivers, a 60-year-old man tried to change the lanes he is driving and hit the median barrier. Other Ferraris that follow from behind apply the brakes immediately and some other cars tried to avoid but things were happened too fast. Cars behind collided when trying to avoid hitting the first Ferrari, end up a tragedy for exotic car enthusiasts.

    Reports said that one witness told the news that they were speeding and end up they were gathered together in a mess. It took six hours for traffic police to clean up the mess. There is not much of information from Police in Yamaguch. However, from the pictures and video, it is roughly a Ferrari F360, F512, F355s, and a F430 Scuderia.

    Mitsuyoshi Isejima, an executive officer for Yamaguchi prefecture expressway told Bloomberg, “It was a gathering of narcissists”.