I bought a new car 3.5 years ago and now I am stuck with it. The car acceptable values the market worth about 20k but I have 25k on my outstanding hire purchase balance. During the acquisition, I paid 3.9k for the down payment.
I need a bigger car. I want to sell this car but I still have to pay extra 5k to the bank for the full settlement and down payment to the new car. Plus 6k for the new car down payment, I am exposed to 11k financial catastrophe to make it better for my family.
Part of the reason is the second-hand car value is crashing down. Ever-changing NAP does not help. 9 years loan still resulting me to pay quite excessively but the effect on principal knock down is far under the car depreciation.
3 financial institutions made a press statement for their intent to reduce our burden by extending the hire purchase term. As a result, our monthly instalment would be reduced but we would be further sink with the car to the grave. If this is the ideal car for my family, I would be very happy. I am sure a lot of people are in the same shoe as me, we can’t straight away buy a big car, and instead we have to climb the ladder. Now the ladder is broken.
The bank also stating that they are re-posses as much of 2500 cars a month. This equate to losses. The car re-sale value is low, lots of it in poor condition and there are costs of re-possession of hiring the bouncer to take away the key. This also represent 2500 potential customer being black listed. Minus figures for their liking. Not to mention the cost of storage and tender out the cars.
In the newspaper it was also stated that we could surrender our car back to the financial institution. After all, that would be what Hire Purchase mean to me. Whether our name will be blacklisted too by surrendering the car, I am not quite sure. Nevertheless, that is the solution that I am seriously considering at the moment.
Extending the term is not a solution for me. As I said, I need a bigger car.
I am more acceptable to interest reduction or elimination. The bank would have choice to reduce the instalment based on the reduced/-eliminated interest or giving us a fair chance to cope up with the depreciation.
A wise thing to do is to have the bank to make a better offer to us as I mention above. First, each of us need to do some survey of how much cash would you get by selling off the car. First, contact the bank to ask for outstanding amount, then go to a few second-hand car dealer to see how much they would take the car for and go to free advertisement column in newspaper or website to see the perceived market values. It might be worth to call a few of the private advertiser to see whether they manage to sell their car at reasonable timeframe, or that would their hope price for the car only.
Should the cash come out negative, I would like to call for unity on this activity. We need to start calling the bank again and state our intent to surrender the car, say in October after raya. By having high statistic, they have to re-evaluate their offers and bound to meet to our proposal. As we know, the car value is less and re-possession would create losses to them. What we are asking is for them to cut our losses and make less money on us without actually making losses on their end. Fair.
Actual surrendering the car in mass would create a big loss gap in the financial institution. For our economy sake, I wouldn’t want that to happen. But they must be conscious about our issues too. Therefore, a compromise is needed. We are thinking of them and they have to think of us. Should they ignore us, and then it will leave us little choice on mass surrendering the car despite the negative effect of their cash flow.
It is my family that I want to feed first, not our government, economy and bank.
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5 comments:
Sorry to know what difficult situation you're in. I think most of the Malaysians are on the same boat as you after the rocketing price of fuel recently. But be not afraid, by spending wisely, things are gonna be back to normal, insyaAllah.
My advise do not change the car. keep your car, as far as the car still can work in good condition. I still driving my 6+ year old car and i not indent to change it until i have used it for at least 10 years.
Buying a new car is not a good investment as it is a depreciation item. I would rather to use the money to buy a house. If i managed to make the money then will use the profit to change the car then.
btw, car price will getting cheaper and cheaper if not the quality or function will get better and better. So what for to change a car for the sick of just to enjoy to drive a new car just for a short term! Put the money in property, sure you will make the money.
BTW, in this world most of the items we buy are depreciated except property. Do you think so?
Hello friends,
end of world is comming. in year 2012 a new planet already discover in our solar system in may 2008 confirmed the prediction of Sumerian saying that our world will hit major disaster on 21 dec 2012. The planet call Nibiru!
So 4 years from now. We better enjoy our life, spend all the money, encourge to take maximum loan to enjoy. If not you will not be having chance to survive in this disaster!
According to the hiden report told 90% of the earth population will die and those survive one will suffer for various issue, this mean event you are survive you no way to enjoy life anymore becuase we will back to stone age and need to start all over again!
To Mr anonymous who wrote about the end of the world, please do not be so superstitious if not stupid. Having a planet coming towards us at a high speed and probably wreaking havoc on our earth is not an excuse to go on a spending spree. What if the prediction do not come true at all? What are you going to do with all your money gone and the loans that you have stacked up? That will be the time where you feel that the world is over for you but not for the smart ones who kept on saving and spent their money wisely. If and ONLY IF the prediction has some sense in it, i suggest you better repent for all of your sins and do as much charity as you can since according to you, 90% of the world population will die. What makes you think that you'll be one of them? Meet God with your good deeds, not with a story on how you ended your living in a luxury.
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