It said banks will remain supportive of the automotive sector, adding that this was evidenced by the overall financing approval rate of 70% for purchase of cars from January to November last year.
“Therefore, car loans will continue to be extended to eligible borrowers,” it said in a statement today.
Yesterday, Malaysian Automotive Association (MAA) president Aishah Ahmad had said the automotive industry was facing a challenge this year due to continued enforcement of strict lending guidelines.
She was quoted by The Edge as saying that local players Perusahaan Otomobil Kedua Sdn Bhd (Perodua) and Proton Holdings Bhd would be the most affected.
“Excluding luxury vehicle sellers, as their markets have the money to easily buy their products, it’s the local players which will be affected the most,” she had said.
She said two factors which could reinforce more stringent lending practices were the implementation of the Malaysian Financial Reporting Standards 9 (MFRS 9) since Jan 1 this year and high household debt levels.
ABM said the impact of the implementation of MFRS 9 on financing costs was expected to be limited.
It also said loans would be provided based on the banks’ assessment of a person’s affordability to ensure consumers were not unduly burdened by excessive debt.
Car loan applications would be assessed according to the existing guidelines and internal procedures of each bank, it said.
“These would include credit evaluation assessments, taking into consideration the applicant’s income as well as existing borrowing to determine his/her capability to service the loan,” it said.
“Banks also take into account that borrowers should have sufficient financial buffers in case they are faced with unexpected adverse events.
“Consumers are thus advised to ensure that proper and complete documentation is provided to the bank when applying for financing.”
ABM said common reasons for rejection of car loans included a history of credit default, insufficient evidence of income, uncertain payment ability and low net disposable income.
“Therefore, it is worth noting that a healthy financial position will be advantageous when applying for loans,” it said.
It said the people may check on their credit status for free via eCCRIS, an online platform which provides access to their own Central Credit Reference Information System (CCRIS) reports after registering with it.
http://www.freemalaysiatoday.com/category/nation/2013/08/02/housing-car-loans-cause-of-rising-debt/