FMCCAM: Tax cuts would hit owners, used car market
KUALA LUMPUR, Aug 1 — Operators of used cars and car owners stand to lose out significantly if the prices of cars and their excise duties are brought down as the move will bring down the value of their existing cars.
President of the Federation of Motor and Credit Companies Association of Malaysia (FMCCAM) Datuk Tony Khor said the easing of car prices and their excise duties will bring losses to the owners of more than 10 million cars in the country who are still in the process of repaying their bank loans.
“Many cars are still only recently purchased within the last two to five years. The owners of the 10 million cars are certain to lose out as the value of their assets will come down.
“For example, take a Camry car bought for RM90,000. If the proposal (to reduce car prices) is carried out, the price of the car will come down to RM60,000... but the loan with the bank will still stand at RM90,000.
“The owner will definitely lose and this situation could potentially create non performing loans,” he said. — Bernama