e-Invoice Implementation Won’t Affect The Auto Loan Market – MAA

According to the MAA, the implementation of electronic invoicing should not significantly impact the local auto loan market.

The government’s decision to implement electronic invoicing (e-invoice) should not have any significant impact on the local automotive financing market, according to the Malaysian Automotive Association (MAA).

MAA President Mohd Shamsor Mohd Zain

The association’s president, Mohd Shamsor Mohd Zain, said this during a press conference held by MAA earlier today, where he noted that this initiative will help to enhance the efficiency and transparency of the hire-purchase loan applications for buying vehicles.

"Bank Negara Malaysia has imposed strict regulations to ensure responsible banking practices under the Hire-Purchase Act. Although customers are required to pay a minimum down payment, some banks still offer 100% loans," said Mohd Shamsor.

The MAA president made these remarks when asked about the impact of the e-invoice implementation on full loans and vehicle sales in Malaysia.

"So I feel that basically, it should not have a big impact on the whole scenario of full loan situations,” he added.

In case you missed it, the Inland Revenue Board of Malaysia (LHDN) announced in May 2023 that it would implement e-invoicing in stages, with the first set to begin on August 1, 2024.

This implementation would effectively eliminate scenarios where a car buyer is offered a ‘full loan’, where the sales agent marks up the price in the invoice when submitting a loan request to the bank in order to ensure that the approved loan amount matches with the car’s full price. This tactic essentially removes the need for the car buyers to put up the down payment, which is usually set at 10% of the car’s total price, thus allowing them to buy the car with a ‘full loan’.

MITI Minister YB Tengku Datuk Seri Utama Zafrul Abdul Aziz

Besides MAA, the Minister of Investment, Trade, and Industry (MITI), YB Tengku Datuk Seri Utama Zafrul Abdul Aziz, also insisted that the e-invoicing implementation would not affect overall vehicle sales this year.

This remark by the MITI minister directly addressed some local media reports that suggested vehicle sales might decrease from August onwards due to the elimination of the ‘full loan’ financing method, following the commencement date of the e-invoice implementation.