The Impacts of PPnBM Relaxation on the Used Car Industry

The government, through the Ministry of Industry, has just provided a tax incentive for new cars. The discount on Sales Tax on Luxury Goods (PPnBM) for new cars will take effect from March 2021. There are three stages in the provision of this tax incentive. In the first 3 months, (March-May), the PPnBM of new cars will be exempted under a government-borne scheme (DTP). In the second period (June-August), 50% discount from normal rates will be given, and in September-December, 25% discount from normal rates will be given.

Not all new cars are eligible for this tax discount. The eligible ones are cars within the sedan and 4x2 passenger car categories such as hatchbacks, MPVs, and SUVs with engine capacities of up to 1,500 cc that use 70% local raw materials and are assembled domestically. As a result, the prices of new cars have decreased by about 10%. 

Unfortunately, the policy to stimulate new car sales has an undeniable impact on used car prices. 

Used car prices have declined

The main impact of the policy is that used car dealers are forced to lower the prices of cars that were previously purchased at normal prices. This is a direct effect of the decrease in new car prices, which forces the prices of used cars to follow suit. 

As a result, in the first 3 months of the implementation of the policy, when PPnBM was exempted, used car dealers experienced a correction in their net income or profit. 

"In the early days of the PPnBM policy implementation, there was a slight threat to us used car dealers when the new car prices were adjusted, as our stock of cars were still valued at the old prices. So perhaps there could be a little correction in prices and profits,” said Halomoan Fischer, Chief Operating Officer of mobil88. 

Used car sales are predicted to continue to rise

This tax discount is expected to increase sales of new cars, which in turn also raises sales of used cars. Thus, the volume of used car sales will increase even though the prices have to go down.

"The used car industry follows the new car industry. If the new car industry moves up, then the used car industry will also improve. So if this policy can increase the volume of new car sales, I am optimistic that used car sales will also increase,” said Fischer.

More benefits in the next 6 months

In the first 3 months, the tax discount is 100%, and after that it shrinks to 50% and 25% in the following 6 months. Therefore, in the June-August and September-December periods, used car dealers can readjust the prices accordingly. "And during the 3-month shift, we hope there will be additional profits for us," he added.

Buying a used car is also relatively profitable. In addition to lower prices, in terms of price depreciation after five years of age, the decline in used car prices is not too significant.

Another advantage of buying a used car is that you don't have to wait for long. You can directly use the car as soon as the transaction is finished. 

However, you should be smart in choosing a used car. To avoid making the wrong choice, you can buy a used car at mobil88. You don't have to bother going to the showroom, just take a look at the cars at the mobil88 e-store. If you have set an eye on your car of choice, then you only need to make a purchase through the mobil88 e-store application. And now, mobil88 is ready to deliver the customer's preferred car to their home so that the customer can check the car and do a test drive with the COD (Car On Delivery) program. 

After you see the unit and are satisfied with it, then you can immediately make a payment. You can also make a booking worth 5 million online via mobil88 e-store, and you will get additional benefits in the form of Engine Warranty and 100% Money Back Guarantee. There are so many advantages that can be obtained by buying a car online at mobil88. 

You can also consult first, starting from choosing the right car, to the right payment method for you. Through mobil88 e-store, you can ask questions about cars to experts via the Live Chat Feature. You can go ahead check the stock of the cars here.