‘Cash-for-clunkers revival will be death blow for used car dealers’

Used car dealers say the cash-for-clunkers programme will be a death blow for the industry.

SIBU: A local used car dealer is of the opinion that the proposal to revive the ‘cash-for-clunkers’ programme by the federal government will bring serious repercussion to the industry.

Thomas Loh said the revival of the programme, mooted by the Transport Ministry, will be a ‘death blow’ to used car dealerships.

“In Sibu alone, we have about 100 second-hand cars dealers dealing with cars that are mostly 10 years old.

“If the programme is revived, the only thing these dealers can do is to close shop,” he said.

Transport Minister Anthony Loke said recently the proposal to revive the cash-for-clunkers programme is not finalised yet as his ministry has to consider issues such as funding mechanism and implementation method.

Cash-for-clunkers is a term for a government-driven rebate system to scrap old cars on the road.

Under the initiative, car owners will be given a cash voucher to trade in their old vehicles – usually more than 10 years old – for a new one.

Loh went on to say that the programme will also put some car owners, especially those who are jobless or are unable to afford a new vehicle, in a tight situation.

“Imagine a buyer who has just settled his nine-year bank repayment loan but, a year down the line, is told that his car has exceeded the 10-year period and should be discarded as scrap.

“What if the buyer is unemployed by the time he settled the loan? How is he going to apply for another loan?

“What if the buyer is unable to afford a new car? What if the existing car, though touching the 10-year deadline, is still in good condition?”

Data from MIDF Amanah Investment Bank Bhd, in a January 2016 note, indicated there are nearly six million cars on Malaysian roads that are over 10 years old.

The last time such a scheme was implemented locally was in 2009 when Proton Holdings Bhd – through its Proton Xchange programme – offered a cash rebate of RM5,000 for a car more than 10 years old in exchange for a new Proton Saga or Persona.

The scheme was discontinued at the end of 2009 due to public outcry.

Another used car dealer, Jason Wong, opined that the move will bring more harm than good to the motor industry.

“Demand for new cars will definitely shoot up as the people do not have any choice,” he said, adding that although he supports the idea of removing old cars from the roads, it is not the right time to do so.

He said such a programme can be more easily implemented in Singapore or Hong Kong as they have better public transportation systems than Malaysia.

Meanwhile, car owner Anna Siaw said she is strongly against the cash-for-clunkers programme, and hopes the federal government will conduct a survey to get feedback from the public on the proposed plan.

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