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Thursday, February 26, 2009

CAR DISCOUNTS: RM5,000 not appealing enough

Some old cars are better maintained than newer models.

THE proposal by the International Trade and Industry Ministry to give a RM5,000 discount on purchases of new cars to those who trade in vehicles more than 15 years old needs some fine-tuning if it is going to be accepted by the people.

Firstly, the amount of RM5,000 is certainly not enough for some to part with their "oldies", especially if the vehicles have been kept well.

For instance, I own a Volvo 240, manufactured in 1991.

But I maintain my car well and although it's 18 years old and "an old man's car", it can certainly put some five-year-old cars to shame!

Secondly, the minister would need to be reminded that in order to encourage consumers to take up this offer, the prices of new cars must come down.
This can be done if the government were to lower the excise duties and sales taxes on passenger cars which are currently exorbitant.

Only then can the RM5,000 incentive really help spur the country's automotive industry in the wake of the global economic slowdown.

For many, the RM5,000 may not be an attractive carrot to lure them to part with their old cars for newer ones, especially when the future of jobs and the economy is not certain.


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