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Common Hidden Fees when Buying a Used Car in Malaysia

Don’t Be Fooled! Here Are the Common Hidden Fees When Buying a Used Car in Malaysia

New cars depreciate in value the minute they leave the car dealership, sometimes by up to 20 percent in the first year alone. That’s why buying a used car can often save you a good amount of money. That being said, many buyers who buy a used car end up paying a lot more than the listed price of the car, thanks to the hidden fees imposed by the dealer. 

These can include the Puspakom fees, car service costs, and processing fees for the used car. And the worst thing is, the fees are often inflated to drive up their profit. 

Here are the common hidden fees you might encounter when buying a car from a used car dealer.

couple buying a used car

1. Puspakom Inspection Fee

Before transferring the ownership of a vehicle from the seller to the buyer, it needs to pass an inspection at Puspakom to certify that it’s in good condition and safe to drive on the road. Below are the two types of inspections.

  • B5 inspection: This is the standard ownership of transfer inspection that’s done to determine that the vehicle is safe, lawful, and is not a cut-and-joined or “kereta potong” vehicle. The B5 inspection costs RM30.
  • B7 inspection: This is a more comprehensive inspection for hire-purchase vehicles, and is required on top of the B5 inspection when you take up a loan to buy the car. It covers additional inspection points including emissions, tire alignment, brakes, and speedometer inspection. The B7 inspection costs RM60.

For most used car buyers, the Puspakom inspection fee should total up to RM90 which includes the B5 and B7 inspection fees. However, some dealerships charge buyers up to RM500.

Read More: We Bust 5 Misconceptions about Pre-owned Cars

2. Loan Processing Fee

The used car loan processing fee usually includes document handling fees, the car loan stamp duty, and the cost of dealing with the bank. While the loan stamp duty charged by most banks is only RM20, some used car dealerships charge up to RM600 in loan processing fees. They might also call it an agreement fee, or even charge you two separate loan processing and agreement fees. 

To avoid paying an unnecessarily high loan processing or agreement fee, ask your dealer for a breakdown of what’s included in the fee. If it seems exorbitant, you can negotiate it down or consider buying from more reputable dealers such as CARSOME. CARSOME only charges a minimal amount in loan processing fees and already includes it in the price of the car, which means that the price you see on the CARSOME website is the final price.

3. Ownership Transfer Fee

The vehicle ownership transfer fee is the fee you need to pay to the Road Transport Department (JPJ) when transferring ownership of any vehicle in Malaysia. In the case of personal cars, the cost is RM100 and applies to individuals who are buying used cars. It’s worth noting that this fee also applies to vehicle ownership transfers that don’t involve financial transactions, such as transfers between family members. 

At some used car dealerships, you can get charged as much as RM500 for a vehicle ownership transfer, which is five times the cost set by JPJ. While it’s understandable that they may need to pay their runners to handle the process at JPJ, you shouldn’t be required to pay RM500 for it.

Read More: 5 Benefits of Getting a Pre-approved Car Loan

hidden fees in buying a used car

4. Car Servicing Fee

When buying a used car, you may be asked to pay a car servicing fee to cover the maintenance costs of the car borne by the dealer. This covers things such as the engine oil change, brake pad change, battery replacement, and other car servicing costs. While it’s considered the dealer’s responsibility to replace the fluids and consumables in the car before handing it over to the customer, many used car dealers charge up to RM1,000 in hidden car servicing fees.

At CARSOME, we put all our cars through a 175-point inspection and carry out a professional refurbishment that covers mechanical and general repairs, as well as paint and body work. Even with the refurbishment cost, CARSOME Certified cars are still competitively priced and do not carry any hidden refurbishment costs – it’s something we take upon ourselves to give you quality pre-owned cars that are above standards.

5. Sales & Services Tax (SST)

SST is a tax that’s only applicable to new cars. However, that hasn’t stopped some used car dealers from applying SST to the price of their cars. If you are told to pay SST while buying a used car, don’t do it! 

With some used car dealers charging hidden fees such as tax and processing fees, you could end up paying as much as RM4,000 to RM5,000 on top of the car’s listed price. 

That’s why we hope this list can help you avoid the hidden fees and make better decisions when choosing a used car dealer.

Read More: How to Sell Your Car with an Existing Loan

Get Honest Prices When You Buy CARSOME Certified

Unlike many used car dealers, CARSOME doesn’t charge any hidden fees on our cars. The listed price on our website is all inclusive, which covers the road tax, Puspakom fee, loan processing fee, and ownership transfer fee. So, you can rest assured that the price you see is what you pay. You also get to view the full 175-point inspection report of every car, so you can know the condition of the car and judge its value for yourself.

toyota yaris g used car carsome listing

A CARSOME Certified listing of a 2021 Toyota Yaris G 1.5

Additionally, every CARSOME Certified car comes with the assurance of quality since we put each car through a 175-point inspection and professional refurbishment process. With CARSOME Certified, you know that each one of our cars is free of major accidents and flood damage while also having safety beyond standards, complete comfort, and refurbished aesthetics. 

For even more peace of mind, you can also enjoy a five-day money-back guarantee and a one-year warranty on every CARSOME Certified car. 

Check out CARSOME today to find a quality pre-owned car with absolutely no hidden fees.

Read More: CARSOME Certified – Learn About the New Standard of Pre-owned Cars