Selling a Used Car in Malaysia from Direct Owner Without a Dealer

Now we come to the second part of my two part journey of buying and selling a used car in Malaysia, the Selling.

Selling your car is quite similar to buying a used one. It can be time consuming, frustrating and expensive. But sometimes you just need to sell your car, maybe because you need the cash for a new one or maybe migrating to another country. So if you are that person, well stick around and I'll share from my experiences of selling two cars in 6 months and I'll show you some good tips on how to go about it here.

Don't we all feel like her when we see that dealer?

Deal(er) or No Deal(er)?

Not them again? Like it or not, it's hard to run away from car dealers. They make a living off selling cars, so they seem like the most logical place to go. In the case of selling your car, it is a little less risky than buying one from them. In fact, selling your car to dealers is the easiest way to get rid of it since they pay cash and will handle all he transfer time consuming activities. But there is one major catch, dealers want to buy your car for CHEAP, and this is especially true if you have what they call a "cold dish car", i.e. anything not Honda or Toyotas and to some extent local cars. 

When I tried to sell my Hyundai, I was getting quotes of RM8000 lower than what I could get if I was to sell it myself. The best price I got from them was RM5000 lower than how much I finally sold mine directly. One tactic these dealers may employ is that they may initially give you a low but still acceptably decent price (pending viewing), but they can spot the smallest problems in your car strip off thousands of ringgit just like that. Who can blame them, since that's the way they make their living?

So should you use a dealer? Well, one good thing about dealers is they will take your car even if it has full of problems as long as you can live with their low-baller prices. So if you have a car that is giving you a lot of problems and you don't want to fix it and you want to get a little bit of money out of it, then bring it to the dealer. He will take it from you, paint it up and sell it to the next unlucky person. But hey, it's not your problem anymore now is it?

If you decide that your car is worth much more than what you have been quoted, then feel free to try to sell it yourself! Selling your car directly will definitely fetch you better prices, but take note that some cars loose their value very quickly and if you are unable to sell your car in a timely manner, you may be bleeding money too. This is especially true of those "cold-dish-cars".

There is another way of selling your car through so-called Agents. Agents are people or company that do not have a dealership BUT they have the expertise of selling cars just like a dealer. They take a smaller commission than dealers (RM1000 to RM2000) but saves you a lot of hassle of doing so. You can use Agents if you have the luxury of leaving the car with the Agent while he tries to sell the car for you.

How to Sell-it-Yourself?

If you have finally decided to sell it yourself and bypass the dealers, then I salute you. You have taken a bold and brave step here. The good new is, you are not alone. Let me guide you to what I have gone through and how I sold my car. Here are the key tips for you:

Advertisement

The best place to start selling your car is to place an advertisement. In the old days, it is the classifieds in the newspaper. Today, it's so much easier thanks to the likes of Mudah.my and Carlist.my. It's really easy and absolutely FREE.

If you want people to get excited about your ad, make sure that you take lots of photos of your car and post it. Write something genuine and interesting about your car and try to avoid the "tip-top condition" because everyone says their car is tip-top.

Try beating this ad below!

Price

Although advertisement plays a big role in your sales, nothing speaks louder in Malaysia than price. From my experience, you will get better responses to your sales if you are to put a price that is near to the final price you are willing to let go of the car. If you place a price that is too high, chances are your car will be overlooked.

Timing

There are times of the year where people are interested to buy cars quickly, and there are times when the sales are slow. You can ask a car dealer and if they are honest, they will tell you. Sales before festive season (like Chinese New Year) can be brisk because people want to drive a new car prior to the new year. Sales right after that season will see a drop in demand. So if you want to sell your car, try not to sell it after or during a festive season.

Condition

This is a very important aspect of the sales. People buy into pretty looking things. If you have a car that you have taken great car of the engine and servicing of the car, but neglect the exterior (e.g. many dents, dirty, etc.) you are going to have a hard time selling it. Yes, this is a used car, but the Buyer's mentality will be "I'm gonna spend tens of thousands of ringgit here, the least I could get is a good looking one".

When I first tried to sell my car, I had a dent and a few scratches on the car. Nothing serious at all. But guess what? It was a turn off. This is especially true for higher value cars. Please make sure you fix everything external first before you show your potential Buyers! Pay attention to details like your aircond (is it cold enough?), tyres (are they worn out?), power windows (is it working?), headlamp glass (is it foggy?) even your car keys (do you need to buy a new casing for it?). Yes, you will have to spend time and money to get it fixed, but trust me it's a small price to pay. I've personally been turned off by dirty cushions and cars that looked like they were not washed for months. The advert says "well maintained" but my eyes tell me otherwise (even if it was true that the Seller maintains the car regularly at the workshop).

It would be a very good idea to keep all your car service receipts and history from whatever workshop you send your car to. The best kind would be if you service from the authorized dealers from your car brand, especially true if your car is still under warranty.

Viewing the Car

When it comes to setting up an appointment to view the car with a prospective Buyer, you should take some precaution in doing so. If possible, do the viewing in a public car park. Bring along friends (especially if you are a lady) with you so that when you do a test drive with your potential Buyer, your friend is there to deter any unwanted situations. 

Closing the Deal

Once you feel a Buyer is genuine it's time to close the deal. Actually, it's still a long way to fully closing it, but I'll explain later here. First of all, your Buyer will negotiate for a price. Ask if the Buyer is paying cash or through loan. Cash Buyers are preferred as it will hasten the sales closure AND there is a lower risk of loans being rejected because the Buyer various reasons the bank rejects the Buyer. This situation will waste your time and potentially cause your car price to drop due to the time you wasted with him. Hence, you may want to say that you are giving the cash buyer a better price than if the Buyer would to take a loan. After agreeing on the amount, immediately get the Buyer to pay you a booking fee. Generally, RM500 is the standard amount to do so. By getting a booking fee, you essentially agree not to sell the car to anyone and you have the right to not refund the fee should the Buyer back out from the deal (even in the case where the Bank rejects the Buyer's loan).

The Sales Process

Similar to buying a car, you need to work on a number of things to finalize the sale. A cash sale will differ from a sale to a person who is taking a hire purchase loan. I've divided the process here for you:

Buying Cash

1. First of all, are you still owing the bank any money? If so, you need to do a settlement (see settlement process below) with the bank first. You probably need to make an agreement with the Buyer that he write a cheque to the bank and to settle the bank loan first. 
• If you owe the bank more than the sale of the car, you will need to pay the difference.
• If you owe less than the sale of the car, then the Buyer will need to pay you the difference after the transfer is complete.
2. You need to proceed to Puspakom to have your car checked. You need to provide the Buyer with the B5 (for JPJ transfer). This will cost you RM30. Or you can get a runner to do it, add about RM100 (you will have to bear it all).
3. You need to purchase the insurance for the car. If you don't know where to look for one, get your insurance from my insurance agent. They provide excellent services.*
4. Bring your Puspakom documents and Insurance cover note and proceed to JPJ to complete the transfer. 
1. Both Seller and Buyer must be present. If not, you need to get a commissioner of oaths to verify the absent parties on a Borang Akuan (JPJ-SAB01 and JPJ-SAB02). Write a simple authorization letter for a representative along with photocopies of his identification card.
2. Fill up Borang TM-1 and two copies of JPJ-K3
3. Transfer costs is borne by the Buyer and should cost RM100. If you do not have the time, you can hire a runner to do it (add about RM200).
5. Once done, the Buyer will pay you the rest of the money owed and you will hand over the car and keys to him. This can also happen in step 1, depending on your arrangement with your Buyer.

Buying with Hire Purchase Loan

1. Buyer to find a few banks and send in his application to their hire purchase department. They need the following documents:
• The car grant
• The owner's IC
• Your IC
• Your driving license
• If you are employed, latest 3 months payslip
• Your EPF or bank statement to verify your salary has been deposited
2. You need to proceed to Puspakom to have your car checked. You must to provide the Buyer with the B5 (for JPJ transfer, RM30) and B7 (for bank hire purchase processing, RM60) forms. Runners can do it for about RM150 more, but it's a just a half day work if seller can afford it.
• Please confirm with your Buyer that he will bear the B7 inspection. When I sold my cars I did bore it, but when I bought my cars, I also paid for it. Please don't make the same mistake as I did by agreeing with your Buyer in advance.
3. Buyer need to purchase the insurance for the car. Since he is taking a loan, the sum assured must be at least 90% of the purchase price as required by the bank. If he don't know where to look for one, he can get his insurance from my insurance agent. They provide excellent services.*
4. Bring the Puspakom documents and Insurance cover note and proceed to the Buyer's bank together with the Buyer and:
• Buyer pays RM300 to RM400 for transfer fees. The bank will handle all the transaction on your behalf.
• Buyer to write a cheque to the Bank with the amount of 10% (or the agreed deposit) of the car price. The cheque will be held by the bank.
• Sign all the necessary documents.
5. At this point, you can already pass the car to the Buyer. You should write a simple gentlemen's agreement on basic terms (e.g. he has received your car in good condition) and have both you and the Buyer sign.
6. Within a few days, the bank will send the cheque of the total selling price to you.
7. If the you still owe your Bank money, then it may take up to three weeks for the transfer to be completed. If so, it is advisable that the Buyer get a loan from your bank to expedite the process.
• If your settlement amount is less than the selling price, then the Bank will send you the difference in cheque.
• If your settlement amount is more than the selling price, then you need to top up to pay the difference to the Bank to complete the transfer.
8. Return the booking fees to your Buyer. 

Puspakom

As the Seller, it is your responsibility to make sure your car passes the Puspakom inspections. If it is a cash Buyer, you only need B5 form. If it is a loan purchase, then you need B7 as well.

Here are a few tips for you when you bring your car for inspection:

1. Make sure you remove the front tint from your car. A major cause of failure for Puspakom is the fact that the tint is too dark, especially for the front windscreen.
2. Make sure you book a time with Puspakom by calling them first. This will ensure you finish your inspection quickly. It took me only an hour to complete my inspection.
3. There are a few "stations" within Puspakom you need to navigate around. 
1. The first is the reception (just a booth actually) to verify what you want to do, your appointment and give you the forms to fill.
2. The second is the payment counter (yet another booth) which will collect your forms and money.
3. The third may not be somewhere you need to go to, but good to know. It's the officer's room (kinda like the manager). You visit him if you have some special request that is reasonable. 
4. The forth is the inspection area itself. Here you pass the keys to the inspectors and they will proceed to do their testing. You can opt to sit down in the waiting room should you feel like doing so.
5. The final station is where you pick up your report. An officer will be there to call you to do so.

JPJ

You can check out http://www.jpj.gov.my/web/eng/guidelines-for-voluntary-change-of-ownership to find out more about transfer of ownership process. Take note that JPJ offices in UTC does not perform transfers. I suggest going to Maju Junction JPJ as it is very big and pretty efficient.

I had a chat with the officer on duty and he was really helpful.

Bank Hire Purchase Settlement

The process of bank settlement is usually as follows:

1. You find out how much you need to settle with the bank. Give them a date which you plan to complete the settlement.
2. Pay the amount at the banking hall.
3. The bank will then issue an e-batal with JPJ to cancel their claim on your car.
4. The bank to issue you with a surrender letter.

There is an easy way to estimate out how much your settlement amount is. Just go to 

http://loanstreet.com.my/calculator/78settlecalc.html

and key in all the details required. All banks use the same calculation and hence makes it very easy to get very accurate approximation.

To settle the loan, the you have to go to your bank (normally over the counter) and pay using the cheque. The bank will issue an "e-batal" to JPJ after the cheque has cleared. This would take a few days. If your Buyer is taking a loan, then his bank will settle with your bank.

Insurance

My insurance is managed by a very reliable contact I have and he has thought me most of what I am sharing here. If you need an insurance agent, look no further:

Insurpac Agency

Insuract Services Agency
03-78757522 (O) 03-78755392 (Fax)
No. 52M, Jalan SS2/67, Petaling Jaya, Selangor Darul Ehsan.

Once your Buyer issues an insurance for his own car, please ensure he scans a copy of the following to you and in turn you send it to your insurance agent. If the insurance has more than 3 months remaining in it, you are entitled to a rebate.

• Insurance cover note
• The updated grant after the JPJ transfer

Driving the Car before Loan Disbursement or Complete of Transfer

Your Buyer may request to drive the car prior to the completion of the transfer, and best time to do this is right after he has gone to the bank to sign his loan agreement together with you. What happens here is that while the money has not gone into the your account and the car is still under the your name, and he already have insurance for the car. You may write a simple gentleman's agreement have both parties signed with the following points:

1. That the Buyer has accepted the car in good condition - please ensure you state everything you are passing on, e.g. both car keys, service book, owner manual, spare tyre, etc. 
2. Any damage and accidents from this point on is his responsibility
3. Any summons he receive from the law enforcement offices shall be borne by him

There can also be special arrangements made for you to release the car first even before the loan agreement is signed (if you trust the Buyer), in which he drives the car with the your current car insurance until the monetary and transfer transactions are completed. The only risk in this case is that if he meets with an accident, he need to pay the insurance company an additional RM400 for claims, and you potentially lose your NCB (no claim bonus). But the risk is small, since he probably will drive the car for a week or two before the payment and transfer is fully settled. Just make sure the Buyer is not gonna vanish after you pass him your car.

A Note about Outstanding Summons

Unfortunately, you can't pass your summons to your Buyer. Shucks. If you have a lot of summons (read: police and JPJ), then your need to settle it first lest you are unable to transfer the car to your Buyer. You can choose not to pay, but you bear the risk of wasting everyone's time.

Summary

Well, if you have read up to here, you must be really serious about selling your car directly. I wish you all the best and do drop me a comment if you find you have any questions. I will try my best to help. You can support me by visiting my blog and if any ad interests you here, do click on them! ;)