When I was selling my car back in August 2013, I was totally clueless on the proper step by step procedure in selling my car directly to direct buyer. I tried googling for more info but there wasn’t a complete guide and tips on what to lookout or what to be aware. After a painful and whirlwind experience, after many phone calls to my friend who used to sell used car, after a painstaking two and a half month in the process, I finally sent off my baby Jazz to the new owner just three weeks ago. Now, I am calm and I can properly pen down my experience as a guide to those that plan to sell or buy a used car directly. By directly means not going through any used car dealer or runner. This complete buying and selling used car guide will lean more to seller based on my experience but I will also weight in buyer experience based on what I know from my car’s new owner.
Step 1: To Sell/Buy Your Car To/From Direct Owner or Used Car Dealer?
The first thing you need to sit down and think properly is whether you want to sell or buy your car from used car dealer or sell it yourself to direct buyer. Are both different if you may ask? Yes both way is so much different.
– Hassle-free (well, not really. Lots of things to be worried as well).
– Offer low resale value to seller.
– Seller in the risk of getting con.
– Worried on misused of car under your name after handing over the car. Used car dealer will only do the name of transfer after they sold the car. If they take a few months to finally sell the car means your car with your name will be driven around.
– Used car dealer adjusting the car total mileage to lower in order to sell the car off easier.
– Better resale value.
– You know who your buyer is.
– Hassle-free. Buyer to do everything.
– Only deliver the car after bank made full disbursement. Risk of getting con is low to zero.
– Buyer may pay a minimum booking fee and drag your time with excuses.
– Loan process might or might not take longer time, depending on buyer document.
– Need to do Puspakom inspection personally, but it was super fast, easy and cheaper to do personally than hiring a runner.
Step 2: Advertise Your Car
There aren’t many buying and selling used car platform a few years ago except for Motor Trader, whom which I worked with for a few years and later on came Mudah.my, which soon became Malaysian favourite buying and selling site for almost everything. Now there’s plenty to choose from magazine to online classified site. Here’s the Top 2 car classified platform that I highly recommend.
mudah.my is probably the site for you to sell almost everything and anything. When Mudah started in Malaysia, they offer RM0 listing fee so more and more used car dealer place classified ad in it. Mudah then focus more on building their car classified section and now it is well-known for it’s fast sales. I wanted to sell my car in a hurry so I list it in Mudah for free. Only one free listing permitted for one user. However not everything is free though. If you need to edit, bump your listing or put it as feature, you will need to pay a fee. The ad will be in the site for two months before the system auto-delete it. I’ve received so many phone calls, whatsapps and sms from the listing in Mudah right until after I sent off my car to the new owner. Some are direct buyer offering ridiculous price, some just ask if it’s available for fun and some are simply curious on why I am selling my car that was in superb condition. I think these people are lack of friends to talk to LOL. There are also used car dealer eyeing on the site, calling you and offering you a used car dealer resale value. Also beware of conmen and fake used car dealer.
(2) Motor Trader Magazine
I wouldn’t recommend this magazine anymore simply because it doesn’t work at all. You paid RM60 for a single spot listing with 25 words in the magazine for two weeks. Motor Trader also offer free listing to their classified website for every ad placed in the print magazine. However do note that if you buy ads in their website, you will not get free spots in the print magazine. I did put in a single spot ad after the first buyer failed to get loan. Many years ago we’ve done a research on the efficacy of advertising in Motor Trader. Interested car buyer will not call the seller immediately after they see the ad in the magazine. They will monitor for at least a few issue before calling the seller. I only get calls after I sold my car. This theory proved our research previously.
Step 3: Car Viewing & Test Drive
After you’ve placed advertisement in your preferred buying and selling used car site, interested buyers will then made contact with you to view the car. Nowadays it is quite dangerous to do so regardless if you are a guy or a girl. I was extremely anxious and usually I bring the whole family (dad, mom, brother) along with me. Choose a place where you are familiar with and with crowd such as petrol station, shopping mall or the best is your house. Do not drive your car for viewing or test drive at night no matter what. Plan a short distant route that you are familiar with. Be extra careful if the interested party brought a whole group of guy friends. NEVER let the buyer test drive alone even though his own car is with you. I have a friend whose car was driven away in this manner.
If you are a buyer, prepare a small amount of cash with you when you go for car view and test drive, just in case you like what you see and you need to book it. The minimal amount you should pay for booking fee is RM1,000.
If you are a seller, prepare and bring along a photocopy of your car registration card (both side) along with an official receipt book just in case the interested buyer is making a booking fee on the spot. Ask for a minimum booking fee of RM1,000 and above, nothing lower than that. You might be told that used car dealer only accept RM500. Tell him/her that is used car and you are direct seller. It is different. Once the booking is made, make it clear to the buyer on the terms and conditions. Give the buyer a two weeks time frame to get the loan approve and done. Make it clear that booking fee is only refundable if the loan is not approved by various banks. Ask for a proof or bank officer contact so that you can confirm with them personally.
Step 4: Loan Application – Buyer
Determine the loan amount that you are applying for and start going around bank asking / bargaining for the best interest rate and loan duration. You can roughly estimate your monthly loan repayment amount by using this loan calculator by imoney.my.
Prepare along latest 3-months of payslip, latest KWSP statement, latest 3-months of bank statement where your salary is credited, photocopy of NRIC and driving licence together with the car’s photocopy of registration card. If you are involving a guarantor, prepare for a copy of NRIC, latest 3-months of payslip, latest KWSP statement and latest 3-months of bank statement where the salary is credited. The best is both buyer and guarantor present at the bank together.
Step 5: Letter Of Undertaking
Buyer will need to keep track with the bank officer from time to time on the loan application process and to find out if the loan is approved or rejected. Once the loan is approved, bank will prepare a Letter Of Undertaking (LOU). If the buyer hand you (the seller) the LOU himself, do call or walk-in to the branch where the loan is applied to check on the authenticity of the letter. Public Bank said they only give verbal approval to buyer and they don’t give out LOU to seller, which is a total obnoxious so I personally walk-in to the bank, demand for a LOU and have a chat with the bank officer.
Step 6: Puspakom Inspection – Seller
As a part of the new rule of buying and selling used car in Malaysia, all cars are required to undergo a Puspakom inspection. You may find the list of inspection centre at this link. Make a call to your nearest Puspakom centre to make an appointment. If you don’t you will not be able to do your inspection as they are quite occupied everyday.
Most bank will ask for a Hire Purchase Inspection (B7), some bank don’t. B7 was introduced in June 2011 and was made compulsory under the law, in an effort to protect buyers of used vehicles from buying illegal or unroadworthy vehicles. Any individual or organisation applying for a loan to purchase a used vehicle will need to show that the vehicle has undergone a Hire Purchase Inspection by producing a B7 report issued by Puspakom. This inspection includes 18 specific checks, a combination of identity checks and physical checks. Besides B7 you are also required to do a mandatory Transfer Of Ownership (B5) inspection which will be required by JPJ when transferring ownership of vehicle. Be early than your actual appointment time. Most people is not punctual so you get to go in earlier and come out in no time. Once you are there, you need to tell the police officer at the front entrance that you are there to do a B5 and B7. Bring along your original copy of registration card, fill in a form and make payment at the counter. B7 cost RM60 while B5 cost only RM30. Both are to be under the expense of the buyer but you can also choose to absorb the cost. I was in and out Puspakom in less than an hour :D. Why need to pay for runner when you can do it yourself?
Step 7: Termination of Current Road Tax and Insurance – Seller
Another new rule implemented by JPJ for buying and selling used car since September 2013 is that car owner (seller) will need to walk-in to any JPJ branch to cancel existing road tax together with the original copy of the registration card and original road tax. Bear in mind that after this step your car is no longer valid on the road. Make sure you only do this when you already gotten your new vehicle or you have a spare car to drive. Ask for a road tax termination form, fill in and take a number. JPJ officer will then do a cancellation on your registration card, update into the system and attach the road tax to the form for submission. There will be refund of the balance depending if you want to claim it or not.
After road tax termination is done, walk-in to your insurance office and do a termination for your existing car insurance. Officer will then check on the validity of your road tax from JPJ website. Once it is confirmed that you have terminated the road tax, officer will proceed to cancel your existing car insurance. You will get back a pro-rate refund of the insurance, if any. Check with your insurance office on their refund process. Mine took just a few days through online transfer.
Step 8: Deposit, New Car Insurance, Signing Loan Agreement & Transfer Of Ownership
This will be the last few steps in the whole buying and selling used car process. After you’ve done this, you (seller) can start preparing your car for hand over. I will elaborate more below separately for easier reference.
(1) Deposit – Buyer
Another new rule implemented to buying and selling used car in Malaysia is that you (the seller) will no longer need to accept deposit for the sale of your car. If you insist so, you will need to hand over to the bank the full deposit amount that you received earlier. This is because bank will need to reimburse the seller the full purchase amount of the car, not the loan amount. By right booking fee received earlier also will need to hand back to the bank unless the buyer mentioned that he/she bought the car at the amount after deducted booking fee amount. For example I sold my car for RM40,000. I received a booking fee of RM1,000. My buyer said he don’t want to trouble me to refund the RM1,000 to the bank so he told the bank that he bought the car for RM39,000. Buyer will need to do a bank draft for the deposit, in my case it’s RM6,000 and hand over to the bank.
(2) New Car Insurance – Buyer
After seller cancelled the existing road tax and insurance, buyer will be able to purchase a new car insurance under his/her name. A photocopy of the cover note / e-policy will need to be hand over to the bank as well.
(3) Signing The Loan Agreement – Buyer, Guarantor and Seller
Buyer together with his/her guarantor (if any) are required to sign on the loan agreement to officiate everything and to proceed with the next process. This can be done at the bank or bank officer will arrange with the buyer on a convenient place and time. Seller is also advisable to present to sign on the Transfer Of Ownership and other relevant forms required.
(4) Transfer Of Ownership (As of October 2013)
My car was probably one of the last few batch that managed to do over-the-counter Transfer Of Ownership so I can’t tell you much on the new mySIKAP that was implemented from 1st November 2013 onwards. You don’t have to do this personally because the bank will use their own runner to do the document submission to JPJ. The cost for everything would be about RM450. Buyer will need to do a bank draft and hand to the bank officer. Usually this will take one day or two days the maximum. My case was a special one because I was told by Public Bank that their priority is used car dealer and not walk-in/direct customer so usually this type of case will take one long week. Mind you other bank only take a day max. But because mySIKAP was implemented a day after the bank submitted for Transfer Of Ownership, the process took near to three weeks.
If buyer and seller insist of doing it personally at JPJ, just go to the counter and ask for Borang Tukar Milik Kenderaan and queue number. Both buyer and seller will need to prepare photocopy of NRIC front and back, cut the NRIC out and stick onto the form. After you’ve done filling in, just walk over to the officer that are responsible to check the details and document, get the verification signature and stamping and wait for your interview turn and pay :). That’s the process that I know before mySIKAP.
Step 9: Car Delivery & Collection
Once the Transfer Of Ownership document is returned back to the bank, the bank officer will process and send to disbursement department. If you opted for online bank transfer, you should be able to receive the full amount immediately on the same day. For my case there’s two different payment – RM6,000 and RM33,000. If it’s cheque, the bank will take a longer time to prepare and send to you so pray hard that the bank chosen by your car buyer is also a bank that you have an account with 🙂
Once you have received the full car sale payment, it is time to bid farewell to your car. Prior before this day I make sure I wash and vacuum the car and even send my car to my cousin brother who happen to own a car workshop for one last check. I found some issue with the engine mounting and change everything for RM700 under my own cost. A day before I deliver my car to the new buyer, the battery died and so I changed that as well for RM200 under my own cost again.
Do not be stingy in sharing on the previous car maintenance work done. Take time to explain to your new car buyer on the feature of the car as well as a brief on things you have installed for the car like audio system, brake paddle lock, security feature and so on.
As for me, I took one memorable photo with my beloved and stand in the middle of the street, looking on as the happy new owner drove my car away. It was tough for me as the car has always been my dream car (it still is!) and I’ve been driving the car for 7 years, caring for it as if it’s my flesh and blood.
Hope this complete step by step guide to buying and selling used car in Malaysia will be useful for you one day. It is not as tough as it looks like. All you need to do is to find out which are the proper steps and procedure in doing so. I managed to sell my car myself, so why can’t you? 😉
(…To be updated from time to time)