Financial Expert: Longer Car Loans Can Be Smarter If You Invest Wisely

KUALA LUMPUR – Financial expert Faiz Azmi recently shared insights on car loan durations, advising consumers on whether to opt for a 5-year or 9-year repayment plan. In a widely viewed video, Azmi explained that while a shorter loan term allows for quicker debt settlement, a longer term could be a more strategic financial move for individuals capable of disciplined saving and investment. According to Azmi, extending a car loan to nine years can significantly reduce monthly payments, freeing up substantial funds. He illustrated this by comparing monthly payments for a new Perodua Bezza, noting a difference of approximately RM296 between a 5-year and 9-year loan. This surplus, he suggested, could be invested in secure, low-risk funds like Amanah Saham Bumiputera (ASB) or Skim Simpanan Pendidikan Nasional (SSPN), which offer competitive dividends and potential compounding returns. Azmi highlighted that ASB yielded a 5.75% dividend in 2024, while SSPN offered 4.05%, the highest in a decade. Furthermore, SSPN provides tax relief of up to RM8,000, potentially saving taxpayers up to RM2,000, particularly beneficial for those in higher tax brackets. However, Azmi cautioned that this strategy is only advisable for individuals who can responsibly manage their finances and commit to investing the saved amount. He warned against longer loan terms for those prone to impulsive spending, as the extra funds might be misspent rather than invested. The core message emphasizes leveraging lower monthly commitments to build wealth through strategic investments rather than accumulating more debt.

TRP

[Watch] Should You Take A 5-Year Or 9-Year Car Loan? It's All About Your Spendi…

Malaysia's TikTok financial guru breaks down Malaysia's biggest car loan dilemma.