Used car demand sees an increase in Q3 2020 due to gov’t initiatives – Perodua Myvi most popular choice

The used car market saw a surge in demand during the third quarter of 2020, as dealers recorded strong sales numbers that aided in their recovery, reported Bernama. According to Datuk Tony Khor, president of the Federation of Motor and Credit Companies Association of Malaysia (FMCCAM), July sales this year saw 25% increased to 37,800 units compared to the same month last year. Meanwhile, both August and September also saw a year-on-year growth of 17%.

“Incentives from the government during the movement control order (MCO), especially the tax exemption and moratorium drove more sales since June. We secured sales of 112,400 units for the last three months,” said Khor.

“The Q3 sales brought the year-to-date (YTD) figure to circa 280,000 units and we could match the industry’s average yearly sales as demand stays brisk in view of the ongoing tax holiday,” he continued. The average yearly turnover for used cars in recent has been around 400,000 units, which is worth over RM15 billion in total, based on an average value of RM40,000 a unit.

In light of the Covid-19 pandemic, and with many looking to manage their financials during the uncertain economic climate, used vehicles have become a hot commodity as they are a cheaper way for people to purchase and drive their own car.

“The strong demand for used cars during the MCO is for cars of the average value of between RM30,000 and RM40,000,” Khor noted. “Those sellable new ones, the used cars also follow. The number one sellable used car in the market is Perodua Myvi. It is the most [sought after]. Myvi is the number one [choice],” he added. Other popular models include the Toyota Vios, Honda City as well as the Proton Saga and Persona.

Khor also said that business was brisk for top sellable, low-mileage used cars, with cars like the Myvi being traded very frequently that they seldom appear in advertisements. “Normally, the Myvi [comes] in and [goes] out quite fast. For the very sellable models we do not need to put too much effort on advertising. The demand for the Myvi has also ensured that the model’s resale value remains high,” he explained.

Despite encouraging sales in the used car market over the past few months, Khor cautioned that this trend may be short-lived and could end following the end of the six-month loan moratorium. “Although the sales tax exemption is expected to keep demand steady, buying sentiment in Q4 is expected to turn cautious as the moratorium incentive ends,” he said.

“[The] buying mood has slowed down in October. We hope the government could announce another three-month extension of the loan repayment moratorium until December 31 to further support the industry during the pandemic,” he added.

If you happen to be in the market for a new ride, and you’re considering a used car but unsure if you should take the plunge, we’ve got a handy guide prepared so you know what to look out for before spending your hard-earned cash.

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