Buy vs. lease a car in Malaysia 2026 : which saves more ?

Choosing between buying or leasing a car is a big decision for Malaysian families. 

With rising living costs, many Malaysians searching for a used car for sale wonder which option is cheaper in the long run. This article compares buying a (especially used) car versus leasing in Malaysia, focusing on family and personal use. 

We’ll break down real ownership costs (road tax, insurance, maintenance, depreciation), explain typical car financing and lease terms, give example prices (Perodua, Proton, Toyota), and end with expert tips and a clear pros/cons table. Whether you’re looking up “used car Malaysia” or deciding to “buy car Malaysia,” read on to make an informed choice.

Buying vs. Leasing: The Malaysia Context

In Malaysia, buying a car typically means taking out a hire-purchase loan. Families pay a down payment (often 10–20%) and monthly installments for up to 9 years, after which they own the car outright. Leasing (also called “car subscription”) lets you drive a car (usually new) for a fixed term (1–3 years) with an upfront fee and monthly payments. 

The monthly lease fee usually covers everything: road tax, insurance, maintenance, and even scheduled service.At lease end you can return the car, renew the lease, or buy it for a pre-agreed residual value..

By contrast, buying means higher initial costs (down payment) but lower monthly payments and eventual ownership. Buying a used car often requires a bigger down payment (typically 20% for a second-hand car) and higher interest rates (many banks charge ~4% for used-car loans).However, you build equity in the car and can keep it as long as you want.

For Malaysian families, the choice hinges on use cases: Do you plan to keep one car for 5+ years, drive long distances, or use it for family vacations? Or do you prefer driving a new car every few years without resale hassle? We’ll explore these angles below.

Real Ownership Costs of Buying a (Used) Car in Malaysia

When you buy a car (especially used), the purchase price is just the beginning. Families must budget for ongoing coststhat add up quickly. Key expenses include:

• Road Tax: In Malaysia, road tax depends on engine capacity. Fortunately for many family cars (MPVs, sedans under 1.6L), road tax is modest. For example, a 1.5L sedan pays only about RM90 per year.A smaller 1.3L car is even cheaper (around RM70/year). For reference, a 1.5L Perodua Myvi’s road tax is RM90,while a Proton Saga 1.3L pays ~RM70. Larger vehicles can cost hundreds of ringgit annually (e.g. ~RM380 base + per-cc for a 2.5L SUV).
• Insurance: After road tax, insurance is the next big item. Insurance premiums depend on the car’s value, engine size, and your No-Claim Discount (NCD). A mid-range RM50,000 car (1.4–1.6L) with no NCD might cost about RM280 per year. Older cars or those without any NCD can be much higher: e.g. a used Proton Saga’s annual premium might range RM1,100–1,334. Over five years, insurance for a new-ish car can top RM1,400 (and grows yearly as NCD increases), whereas an older used car without NCD can easily cost several thousand ringgit in insurance.
• Maintenance & Repairs: All cars need upkeep. Industry estimates suggest budgeting around 1% of the car’s value per year for maintenance. In practice, a 50,000–80,000 km servicing interval might cost RM1,500+ per year (this covers oil changes, minor services, but excludes major parts like batteries, tyres or timing belts which can cost more). Used cars can demand extra work if parts wear out. Thus, maintenance for a typical car can reach RM7,000–10,000 over 5 years.
• Depreciation: Cars are depreciating assets. New cars lose value fast: up to 15–35% in the first year and roughly 50% by year five. Buying used mitigates this shock, since much depreciation has already occurred. However, you still lose value every year you own it. For example, a RM50,000 car might only be worth ~RM25,000 after five years. This loss means your “true” cost of ownership (purchase price minus resale value) is significant.
• Fuel & Other Costs: Families should also account for petrol (fuel), tolls, parking, and occasional fines. Fuel economy varies, but driving 1,000 km a month in a 5.5L/100km car at RM2.15/L (petrol price) is roughly RM1,200/year. Tolls and parking can add hundreds per month in urban areas. These are unavoidable if you drive often.
• Financing Charges: If you finance the car, interest is a hidden cost. Malaysian hire-purchase (HP) loan rates are generally lower for new cars (around 3–3.5% p.a.) and higher for used (often 3–4.5%). For instance, Public Bank might charge ~3.3% on a new car vs ~4.1% on a used car. Over a typical 5–7 year loan, interest can add 10–20% to the car’s cost. Recent 2026 reforms (abolishing the old flat-rate “Rule of 78”) will shift loans to reducing-balance interest, which helps borrowers but still adds cost. Don’t forget bank fees, loan processing fees and down payment (usually 20% for used vehicles).

In summary, families must tally road tax, insurance, fuel, maintenance, loan interest, and depreciation when evaluating buying a car. These hidden costs often surprise new owners. For example, a 5-year projection might look like:

• RM50k car sticker price
• –RM25k resale (50% depreciation)
• RM4,000 total 5-year maintenance
• +RM1,400 total insurance (RM280/year)
• +RM450 road tax (RM90/yr)
• +petrol, tolls… (additional).

It’s clear why experts urge caution on sticker price alone

How Leasing a Car Works in Malaysia

Leasing (or car subscription) is still relatively new in Malaysia, but growing fast. Essentially, you rent a car long-term from a provider. Here’s how it generally works: you choose a car (often new or recent model) and sign a contract for 1–3 years. You pay an upfront fee (sometimes equivalent to 1–3 months’ lease) and then fixed monthly payments. Importantly, that monthly fee usually bundles all major ownership costs: road tax, insurance, maintenance and repairs, and warranty coverage are included. The leasing company handles servicing at authorized workshops, and most mechanical issues under warranty are covered – a big plus for families who don’t want garage hassles.

Most Malaysian lease plans come with a mileage cap (e.g. 1,500–2,000 km/month). Exceeding it incurs extra fees. At lease end, you typically have three options: return the car with no further obligation (aside from wear-and-tear fees), renew/upgrade into a new lease, or buy the car at the guaranteed future value (GFV) pre-agreed in the contract.

Leasing shines for those wanting guaranteed monthly budgeting. You know exactly what you pay each month, with no big surprises for servicing or insurance. Driving a new car every few years is easy since you simply swap leases. However, leasing generally costs more per month than a loan payment. some companies notes that even over a few years, a leasing plan’s monthly fee is higher than an equivalent 5-year car loan. 

Cost Comparison: Buying vs. Leasing

Here are some key contrasts to keep in mind (a detailed pros/cons table follows below):

• Upfront vs. Ongoing Costs: Buying requires a significant down payment (10–20% of price) and then lower monthly loans. Leasing usually needs only a smaller upfront fee/deposit and then higher monthly payments (covering all costs).
• Monthly Budget: A car loan’s monthly installment is typically lower than the lease fee for the same car.But with buying, you must also pay for petrol, road tax, insurance, tolls, and maintenance out-of-pocket. Leasing bundles most of these, so the lease payment is “all-in”.
• Maintenance & Repairs: Buying means you handle (and pay for) all maintenance after warranty. Leasing means the provider handles scheduled servicing and major repairs (still covered under warranty). This can save time and unexpected expense.
• Depreciation & Resale: When you buy, your car’s depreciation matters because you own an asset. A used car’s steepest depreciation may be behind it, but it will continue losing value. If you sell, you recoup some value. With leasing, the car depreciates in the background – you never own it, and at lease-end you just walk away or pay to buy it. You don’t worry about resale, but also get no asset back.

Example Prices of Popular Used Cars in Malaysia

To ground our discussion in real numbers, here are some typical price ranges for popular models in the Malaysian market:

• Perodua Myvi (Hatchback): A brand-new Myvi (2023) 1.3L goes for ~RM46,500–48,500, while the 1.5L version is ~RM50,900–59,900. On the used market, older Myvi prices start very low – around RM7,800 for early 1.0L/1.3L models, and from RM15,800for 1.5L variants. (For example, a well-kept 2015 Myvi 1.5 might sell for ~RM30–35k today, vs ~RM56k new).
• Proton Saga (Sedan): New Saga 1.3L models start around RM50k. Used Saga prices are very affordable: Popular variants range from roughly RM17k to RM26k depending on year and trim. (For instance, a 2014 Proton Saga FLX 1.3 might be ~RM20k–22k now.) Road tax for a 1.3L Saga is about RM70/year, and insurance can be RM1,100–1,300/yr, as noted earlier.
• Toyota Vios (Sedan): The compact Vios is very popular. A new 2023 Toyota Vios starts around RM83,000. Second-hand Vios spans a wide range: according to Carlist, used Vios prices go from about RM11,000 for a 2006 model to RM67,000for a 2022 model.This reflects how well Vios holds value. Even a 2018 or 2019 Vios is often RM40k–50k on the market today.
• Other models: Many Malaysians also consider family-friendly Proton MPVs (X70, X50) or Perodua MPVs (Alza, Aruz). Their used prices vary: e.g. a 2019 Proton X70 1.8L might be ~RM75k, while new it was ~RM100k. Generally, popular brands like Toyota, Perodua and Proton retain value well, which benefits owners but can make leasing (with a high residual purchase option) less attractive for used models.

These examples illustrate the gap: a family could pay under RM20k for a used Proton Saga or Myvi, whereas leasing a brand-new similar car would be closer to RM700+/month (depending on the deal). Conversely, driving a new Vios via lease might cost >RM1,000/month, whereas buying it on loan would cut the monthly finance cost in half (though you'd cover your own insurance and upkeep). Always compare total 3–5 year costs, not just monthly alone.

Buying vs. Leasing: Pros & Cons

Expert Tips: When to Lease vs. Buy

Car industry experts and consumer advocates generally agree there’s no one-size-fits-all answer. The right choice depends on your situation. Here are some guidelines:

• Lease might be better if:

  • You want a new car every 2–3 years and hate the hassle of selling a used car.

  • You prefer predictable costs: leasing includes maintenance, breakdown coverage, and usually free periodic servicing.

  • You have cash flow constraints (e.g. small savings) and prefer a low deposit instead of a 20% down payment.

  • You plan to keep the car only short-term (e.g. you’re an expat or may move soon).

  • You drive moderate miles (within lease limit) and don’t want to worry about high-mileage or wear-and-tear fees.

• Buy (often used) might be better if:

  • You intend to use the car long-term (5+ years), including heavy driving (family trips, e-hailing, etc.). In this case depreciation is less important and you’ll eventually pay off the loan.

  • You plan to buy a reliable brand (Perodua, Proton, Toyota). These models have low maintenance and spare-part costs, so owning them can save money over years

  • You already have a high No-Claim Discount from prior insurance (transferring NCD can cut insurance costs) – something a lease cannot give you.

  • Your credit score is good, so you can get the best loan rates (and take advantage of the new reducing-balance interest law coming in 2026). 

  • You want the freedom to drive without mileage restrictions.

As Keshvinder Singh Dhillon of Piston.my advises, leasing is a practical alternative given high ownership costs, especially for lower-income earners who can’t afford big loans. But for many middle-class families, the long-term math favors buying: once a family car loan is paid, you only shoulder running costs, whereas serial leasing keeps the payments going.

Conclusion: Which Is Cheaper for Your Family?

There is no “one answer” for all families, but overall, owning a used car typically saves money in the long run if you plan to keep and use it extensively. Buying a reliable used model (especially an affordable brand like Perodua or Proton) often means much lower total cost after 5–7 year. You benefit from gradually declining insurance premiums (via NCD), and you can sell the car later to recoup some value.

Leasing can make sense if you value convenience, guaranteed maintenance, or want to minimize upfront costs. It can even save money if you would otherwise face huge repairs on an older vehicle, since the lease covers warranty repairs. However, if you keep leasing indefinitely, your cumulative payments will exceed buying.

Ultimately, compare realistic 5-year scenarios for your case: total lease payments (with any end-of-lease fees) vs. total purchase costs (loan + running costs – resale value). Whichever scenario leaves more money in your pocket is the better deal.

Important: Always factor in all keywords of cost – road tax, insurance, maintenance, depreciation, finance rates – when doing your homework. And remember that Malaysian car financing rules changed in 2026: the new reducing-balance interest method makes early loan repayment fairer, which slightly favors buying over leasing. Use the pros/cons above and the FAQs below to guide your decision. 

FAQs

1. Is it better to lease or buy a car in Malaysia in 2026?

It depends on your goals. For long-term family use with high mileage, buying (especially a reliable used model) is usually cheaper over time. Leasing can be attractive if you want short-term commitments, lower upfront fees, and included maintenance. Keep in mind new 2026 laws (reducing-balance interest) will make buying via loan more borrower-friendly.

2. Can I lease a used car in Malaysia?

Not typically. Most Malaysian leasing/subscription plans involve brand-new or nearly-new vehicles. Leasing a privately owned used car is uncommon. If you want a second-hand car, the usual route is to buy it (often via hire-purchase loan) rather than lease.

3. What are the hidden costs of buying a used car in Malaysia?

Besides the sale price, hidden costs can include: unexpected repairs or parts replacement (worn timing belt, tyres, etc.), higher interest on used-car loans, and lack of the previous owner’s insurance NCD (meaning higher premiums). Don’t forget Puspakom inspection fees, loan processing fees, and the risk of buying a car with undisclosed issues. Always budget for maintenance (~RM1,500/yr) and remember that older cars may need more frequent service.

4. Is leasing cheaper for families?

Leasing can offer convenience (maintenance and warranty) and steady budgeting, but not necessarily lower cost for a family that keeps the car long-term. If a family drives a lot, buying a sturdy car often saves money, since you won’t have continuous lease payments. However, leasing can be attractive for a family that only needs a car for a few years or wants a brand-new MPV without resale worries.

Read More: Yes, you can sell your car even If It has an existing loan! here’s how to do It

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