SST discount on cars has ended in Malaysia

SST discount on cars has ended in Malaysia

With the SST discount ending, how will new car sales fare?

KUALA LUMPUR: The announcement was made just yesterday and already there is a lot of negative social media attention on this retirement of the sales tax discount that has been in ‘play’ for the past 24 months (it was first announced in June 2020 to revive the fledgling auto industry).

Having the sales tax discount has cost the Malaysian government more than RM4.7 billion in revenue and this has benefited more the middle class and well-to-do Malaysians rather than the lower middle class that needs the savings when buying a basic vehicle.


From June 2020 till today, Malaysians have bought more than 868k passenger vehicles and this is proof that there is still plenty of savings held by the upper-income earners.

We did mention in the past week that the Malaysian government's efforts to boost vehicle sales was very welcomed and the SST discount did just that, however, it is time to restore the SST on locally assembled cars (the discount was 100 percent) and fully imported cars, including grey market, reconditioned cars from private approved permit holders (discount was 50 percent) as right now and in the next 6 to 9 months there is a long waiting list for almost all new cars and only bookings made and in place before and on 30th June 2022 will be eligible for the current SST discount.

2022 Perodua Alza

So, if you have not placed a booking for the soon-to-launch Perodua Alza or the just previewed Honda HR-V, you will need to make a decision in the next few days to buy or not.

Meanwhile, before you check your bank balance and the used value of your current car, please note that any booking you make this month for a very popular model like the 2022 Alza or the 2022 HR-V, you might only be able to take ownership in early 2023 which is 6 months away and will also mean that your ‘new’ car will immediately be ‘one-year-old’ on the registration document.

2022 Honda HR-V

To save some money with the given SST discount of about RM 4,000 for the latest Honda HR-V you might be losing more than RM 4,000 on depreciation on your current car as the date of sale will be in 2023, a year older.

Therefore, before you rush out and book a new SST discounted popular car model next week, please do a detailed calculation of your possible loss on your used car sale and the waiting time which will extend to 2023. 

Also read: 5 new cars many Malaysians are waiting for

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