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If you’re an expat that’s just accepted a position in Malaysia - congrats! The country is an exciting mecca of industry and commerce, as well as a central hub for travel, with quick connections to many countries near by.
As you settle into your new home abroad, you’ll likely have many questions - perhaps whether you should buy a car for the duration of your stay. The definitive answer here is yes; Kuala Lumpur, Penang and anywhere else you’ll likely live in Malaysia are very car-centric.
However, whether you should buy a car locally or import a vehicle you already own is up for debate. Read on to weigh the costs associated with both options, where to buy, how to register, special driving laws in Malaysia and more. Buckle up!
Importing your car into Malaysia is extremely expensive. Due to prominence of the motor industry in Malaysian economy, the process to import vehicles into the country has been made a lengthy and complicated process.
Another drawback of importing your own vehicle are the high duty taxes, which often exceed the value of the car. Should your car need any repairs while in the country, foreign car parts are also very expensive to import.
When shopping for cars locally, it’s much more cost effective to look for Malaysian-made vehicles, which are sold for far less than imports for a few reasons; manufacturing of cars is heavily subsidized by the Malaysian government and foreign vehicles have 100% tax added. A Toyota, Ford or Hyundai will set you back more than 100,000 RM for a new car.
Popular local brands in Malaysia include Proton and Perodua. If you plan to buy a new car, these brands will help keep the cost down, running closer to 60,000RM. However, you’ll generally find cars in Malaysia are more expensive than in Europe or the US.
If you were to import your vehicle into Malaysia, you'd be required to submit an application for an Approved Permit (AP) to the Ministry of International Trade and Industry, and you'd be obliged to:
- Provide a filled in JK69 form
- Provide a valid work permit
- Use your car for only personal use
- Not sell or transfer the vehicle in Malaysia
- Export the vehicle upon the expiration of your work permit
You’ll also be expected to provide proof that:
- The car was registered in your home country
- You have a valid passport and a Malaysian visa
- You have a driver’s license valid in Malaysia
- You’re the owner of the car and have the original registration documents
- You’re employed in Malaysia and have a letter of employment
The approval process can take between 5-7 working days, depending on whether you lodged the application in person or online.
When buying a new car in Malaysia, you’ll need to follow a few key steps.
- Ensure you have the proper documentation, including:
- Valid driver’s license
- Work permit, if you’re taking out a loan
- Payslips from the last 3 months
- Bank statements from the last 3 months
- Letter from employer
- Employees Provident Fund (also know as KWSP statement or Penyata KWSP)
- Once you have the above documents, you can now:
- Apply for road tax
- Register the car with the Road Transport Department
- Apply for car insurance
- Apply for a loan, if you need to
- The seller manages all of the paperwork in the process, including arranging delivery of the car.
The process is very similar if you’re buying a used car. However, you’ll be transferring ownership and therefore we suggest:
- You have the car inspected before purchase to make sure that it’s in good condition and priced fairly. Goo KANTEI inspection is recommended as a very thorough inspection service
- Obtain a roadworthiness certificate from Puspakom
- Transfer ownership from the old owner at JPJ - the Road Transport Department
The cost of owning a car in Malaysia extends well beyond the purchase price. You’ll have to cover monthly or annual expenses such as road tax, insurance, maintenance, parking, tolls and of course petrol.
While these costs can vary, you can see a breakdown of estimated costs of owning a car in Malaysia below:
- Road Tax - 90RM/ year
- Insurance - 1,100RM/ year
- Maintenance - 800RM/ year
- Parking & Tolls - 4,000RM/ year
- Petrol - 1,600RM/year
If you’re interested in buying a used car, one of the best tips is to purchase from another expat who’s leaving the country and needs to sell their car. This way you’ll generally be able to negotiate a great price.
Typically, this is a win-win situation, as you’ll both get a better deal than you would through a dealer. As well as expats also tend to keep a car well serviced, which isn't commonly practiced in Malaysia.
The best methods to search for expats selling used cars are:
Checking with your new employer if anyone moving country is selling a car
Beware - there are some dodgy dealers out there, and there is no consumer protection in Malaysia. Especially if you are an expat, you may be a target for getting ripped off. In some cases, it’s better to go through a trusted dealer such as City Motors.
When the time comes to pay for your vehicle, your payment method will likely depend on your investment. If you’re purchasing a higher-end vehicle, you’ll likely want to investigate a car loan.
However, if you’re buying second hand, you may be able to make a cash payment.
If the majority of your funds are sitting in a bank account abroad, the best option is to transfer your money to Malaysia with Wise. Apart from offering the real rate - the one you can find on Google and XE - they also only charge a fair and transparent fee, stated upfront. Many banks may say they don’t charge any fees, however they may add a markup to the rate they offer. Therefore, before you transfer make sure to compare rates with a currency converter tool.
To register an imported or locally purchased car in Malaysia, you must complete the registration process with the Malaysian Road Transport Department and then you’ll be issued a number plate.
In order to complete registration, you’ll need the following documents:
- PUSPAKOM inspection document
- Identification documents
- Customs’ information (if imported)
- The permit for the vehicle
This process is the same for all vehicles, including motorcycles and vans.
Driving in Malaysia can be very overwhelming for an expat that’s not used to the local road culture. There’s a general feel that ‘anything goes’ on the road, so for the faint of heart, driving in the country can take some getting used to. You’ll have to cope with heavy traffic as well as with speeding cars and motorcycles. There’s a lot of highway tolls, so it’s best to invest in a toll pass, such as Touch ‘n’ Go's’ pass or SmartTag.
According to Section 28 of the Road Transportation Act 1987, if you have a valid driver’s license issued from any of the countries on this list, you may drive with it. If your license is issued in English (or Malay) it does not need to be translated. However, if it’s issued in another language, you must have a translated copy for it to be valid. You may also drive with your licence and an International Driving Permit, if the licence is written in English.
There are no requirements for specific equipment in Malaysia. All drivers must have a valid license, along with car registration and insurance.
Most importantly, driving in Malaysia is done on the left, since Malaysia is a former British colony.
Other road laws are fairly standard. For example, it's illegal in Malaysia and punishable by fine or prison to exceed the speed limit or drive under the influence of alcohol or drugs.
|Car and Driving Vocabulary
Owning a car while living in Malaysia is quite essential. Whether you choose to import a vehicle or purchase locally can greatly vary in price. The most cost-effective option for expats is to buy a locally-made model that's been previously owned but is proven to be in good condition; this will help eliminate further costs like maintenance and repair. Ready to hit the road?
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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