Previously, local car interest rate has risen up to 4.1% and above. For foreign cars, interest rate was around 3.5%-3.7%. But car prices will be adjusted down to counter the rate increase.
Will Malaysia car price drop? I think it’s a great time to buy car as many manufacturer have giving discount & great promotion to clear stock. The reason, economic crisis, consumer’s spending power become less, thus they need to reduce car price to attract people to buy.
Some people said that due to weakening economy as the banks is losing money they will increase the interest rates. Yet, I feel that world economy is bad, and many other countries have reduced their interest rates. I’m guessing that the Malaysian banks won’t increase the interest rates this year.
I just want to become a potential owner of a new car, i would suggest saving more cash that can increase your down payment, thus reducing the amount and duration of loan, hence reducing the interest that you have to pay.
How You Calculate Your Car Interest Fee?
Somebody said that the first year car loan interest is the highest. Do you know why? To make it simple, let say u owe bank MYR 1000 for 3 months, the bank ask you to pay MYR 500 for every month (total MYR 1500). You paid for the first month for MYR 500, so you still owe bank roughly MYR 800 because in the MYR 500 you paid, MYR 300 is for interest and MYR 200 deduct the money you lend from bank.
So the next month u owe bank MYR 800, but now the bank couldn’t charge you MYR 300 as interest because you now only owe bank MYR 800, so you paid MYR 500 again and there will be MYR 300 go for principal and MYR 200 go for interest, and you may observe that the interest is getting lower now.