CAR SCRAPPING SCHEME

RM5,000 Car Rebate Ends In December
2009/07/13

By Minderjeet Kaur
KUALA LUMPUR: If your car is more than 10 years old and you are planning to get rid
of it for a national car, do it now as the RM5,000 rebate offer will end in December.

The rebate, which comes under the government's second stimulus package totalling RM60 billion, is expected to be withdrawn in five months' time.

National car maker Proton Bhd confirmed the government's move in an email to the New Straits Times.

Its Xchange programme works in tandem with the stimulus package offered by the government.

Under the programme, a car owner giving up his vehicle for scrap would be offered a redemption voucher entitling him to a rebate when purchasing a new national car.

Proton has so far issued 11,800 vouchers to car dealers. It is not known if Proton will dig into its own coffers to continue the scheme.

"Continuation of the programme after the expiry is still undecided until further notice," the company said.

Proton said it saw a drop in sales beginning in mid-April.

"Demand is decreasing due to the limitation to third party transfer which took effect on April 15 to ensure the genuineness of participation in the Xchange Programme."

While some car dealers said it was a good way to get the old cars off the road, others felt the scheme was "not reaping the fruits" that had been hoped for.

Johor Motor Hire Purchase and Finance Company Association president David Chin Ywee Gin said car dealers there did not see the jump they had expected.

He said many car owners felt their vehicles could fetch a higher resale value of up to RM10,000. He said it would be better for Proton to scrap the Xchange programme to reduce the car manufacturer's burden in the long run.

But Federation of Motor and Credit Companies Association of Malaysia said the government should not stop the programme.

"It is one way to get rid of hazardous cars which also pollute the air with black smoke," said the association's president, Datuk Tony Khor Chong Boon.

About four million cars are said to be about 10 years old and Khor said some of these cars were in rural areas and had poor brakes, which put their owners and others at risk.

He said the programme would boost Proton car sales and in the long run help the government to make Malaysia a regional hub for the car industry.

"Instead of scrapping it, the government should open the rebate system to all cars to stimulate sales of locally-assembled cars."

The Malaysian Institute of Road Safety Research felt the rebate was good for those having cars with low resale value.

Its director, Dr Wong Shaw Voon, said some cars were only worth RM1,000 to RM3,000 and should not be on the road.

"But some cars can fetch higher than RM5,000 and these owners should not take up Proton's rebate because they will lose money."


** So, finally its coming to an end in December. As a "small time" car dealer, I don't see the scheme benefiting us, and only certain category/models of cars are eligible for the scheme.

And there are "red tape" or certain procedures to go through before the process can be considered as done.

Personally, I don't encourage my customers to go through with it, and I would rather help them to dispose off their "old workhorse" by looking for a buyer who wants it.
And the owner in the end can get a better deal than the RM5000 being offered.**

Commment made by: Stephen Dass AKA Merekah Fajar