Car dealers today submitted a memorandum to the government asking for a deferment, and ultimately to drop the planned implementation of the new B7 inspection system for used cars on the market.

About a dozen members of the Federation of Motor and Credit Companies Associations of Malaysia (FMCCAM) met with Minister in the Prime Minister’s Department Koh Tsu Koon in Parliament, seeking his help to stop what they described as an unnecessary burden on consumers, dealers and banks.

The federation’s honorary secretary-general Khoo Kah Jin said their main concern was that the additional 14-point inspection under the new B7 system would transfer more costs on to consumers, while they also expect it will take too long to complete.

“Under the current B5 (system), which is a four-point check, it takes between two to three hours to finish. Now Puspakom recently announced that they will extend their operating hours to midnight and on Sundays. This shows they are not ready for this,” he said at a press conference in the Parliament lobby.

NONE Khoo, who earlier led a 100-strong protest by members of the Kuala Lumpur and Selangor car dealers association against the B7 system, added that it will simply force used car dealers and buyers to send the vehicles for checks twice.

He said this would lead to overlapping checks that would only burden used car buyers, the majority of whom are made up of those from the lower income group.

‘Amendments not business-friendly’

Khoo went on to add that the amendments to the Hire Purchase Act 1967, which brought about the B7 system, also put new and used car dealers at a disadvantage in terms of booking fees.

He said under the amended Act, car buyers are now only required to put down one percent of the vehicle cost to book a car, but dealers are expected to return 90 percent of the down payment should a client cancel their purchase.

“Let’s say a used car costs RM10,000; that means the booking fee is RM100 but dealers will have to pay back RM90 if the client cancels on us. That leaves us with just RM10.

“Even new car dealers are concerned about this, because for a car that costs RM500,000, the booking fee is just RM5,000 and the same rules apply... this is business-unfriendly because when the consumer only puts down RM10, the commitment is not there,” he said.

Koh gave an assurance that the government will take their concerns under consideration, and later brought the delegation to meet Domestic Trade and Consumer Affairs Minister Ismail Sabri Yaakob to discuss their predicament.

Yet another protest

Meanwhile, another protest was held against the amendments to the Hire Purchase Act, this time in Malacca.

used car dealers demo in protest, melaka The Malacca Car Dealers Association demanded that Ismail Sabri’s ministry re-evaluate the amendments, echoing their peers’ claims that it would do more harm than good for consumers and the industry on the whole.

The association’s vice-president Raymond Choo said the situation would push used car prices even lower as consumers would continue to use their cars for longer periods, with less incentive to change to newer vehicles.

“The banking industry would be affected due to the slowdown in vehicle sales. Businesses that do not have much capital will also feel the pinch as the amendments will require dealers to settle all outstanding loans within seven days before selling a used vehicle to a new buyer,” he said, adding that this will force many dealers to close shop.