Reducing multiple private car ownership in Malaysia

According to the Road Transport Department (JPJ), there are 31.2 million motor vehicles but only 16.8 million licensed drivers registered in Malaysia as of 31 December 2019. On average, there are 2 motor vehicle registrations for each registered driver in Malaysia. In the mid-term, Malaysia needs to focus on curtailing multiple private car ownership.

Bank Negara Malaysia (BNM) should limit a second loan period to a maximum of 5 years with a maximum loan amount of 70% of the sticker price. Malaysia is one of the most expensive places to buy cars in the world but access to cheap and easy credit is boosting car sales.

Car OwnershipTypeMaximum Loan (%)Minimum Deposit (%)Loan Tenure (Years)
First/Sole CarNew901010
Second CarNew70307
Above Third CarNew50505
Table 1: Proposed Multiple Car Loan Rate & Tenure

JPJ needs to introduce “Progressive Vehicle Registration Fees” to impose a progressive tax based on car prices. Limiting credit access may only deter the Bottom 60 from owning multiple cars as the Top-40 are largely cash buyers. Thus, JPJ needs to make the cost of registering a second car and beyond more expensive based on the vehicle’s price.

Car Price Band (RM)Fee Rate (%)Band Fees (RM)Maximum Fees (RM)
<200,0002% for each RM50,000RM 1,000RM 4,000
200,001-300,0003% for each RM50,000RM 3,000RM10,000
300,001-500,0005% for each RM50,000RM10,000RM20,000
>500,00010% for each RM50,000RM 5,000~
Table 2: Proposed Progressive Vehicle Registration Fees

JPJ should introduce an annual multi-car road tax. The road tax for a second car should be twice the original rate while a third car should be thrice the original rate and so on. This will increase annual maintenance costs of owning multiple cars simultaneously. However, households could shift car ownership to their children, parents and/or spouse to skew around it.

Malaysia’s under-developed and fragmented public transit system forces the working class to be dependent on cars for mobility. Thus hitting the first and sole vehicle owners is not wise. Instead, our focus should be on curtailing multiple car ownership to start.

Central Committee
(Bureau for Environment & Climate Crisis)
Parti Sosialis Malaysia (PSM)
State Secretary
Parti Sosialis Malaysia Negeri Melaka (PSM Melaka)

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