RHB vs Public Bank Car Loan Malaysia 2026: Cluster-King Head-to-Head Before HPAA
Four days. That's how long the old flat-rate Malaysian car loan has left. On 1 June 2026 the Hire-Purchase Amendment Act 2025 abolishes the flat rate and the Rule of 78 — and the winner of the RHB-versus-Public-Bank decision flips on the same date. Public Bank's 2.45% flat beats RHB's 2.50% flat for anyone signing before then. RHB Vehicle Financing-i's 3.18% reducing-balance floor beats Public Bank Aitab-i's 3.31% for anyone signing after.
Short answer: If you sign before 1 June 2026, Public Bank Hire Purchase wins on the flat-rate floor — about RM 280 cheaper than RHB on an RM 80,000 / 7-year loan, and the 260+ branch dealer pipeline compounds the advantage on peninsular purchases. If you sign on or after 1 June, RHB Vehicle Financing-i (3.18% p.a. reducing-balance) edges Public Bank Aitab-i at the floor, and RHB's denser East Malaysia and East Coast footprint pulls the verdict further its way for any buyer outside the Klang Valley.
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Compare car loan rates — free, 2 minutesSide-by-Side: RHB vs Public Bank Hire Purchase
| Feature | RHB Hire Purchase | Public Bank Hire Purchase |
|---|---|---|
| New car rate (pre-HPAA flat) | From 2.50% flat (≈4.63% EIR) | From 2.45% flat (≈4.53% EIR) |
| New car rate (post-HPAA reducing balance) | ~3.18% p.a. (Vehicle Financing-i) | 3.31% – 4.10% p.a. (Aitab-i) |
| Reconditioned car rate | From 2.60% flat (≈4.81% EIR) | From 2.80% flat (≈5.18% EIR) |
| Used car rate (≤5 yrs) | From 2.80% flat (≈5.18% EIR) | 2.80% – 3.30% flat (≈5.18%–6.11% EIR) |
| Max tenure (new car) | 9 years | 9 years |
| Max financing (new car) | Up to 90% | Up to 90% |
| Max financing (used car) | Up to 80% | Up to 80–85% |
| Minimum income (salaried) | RM 2,500 – RM 3,000 gross | RM 2,000 gross |
| Self-employed income floor | RM 4,000+ gross, 6–12 mo bank stmt | RM 3,500–4,000+ gross, 6 mo bank stmt |
| Age eligibility | 21 – age at application, loan settled by 70 | 21 – 65, loan settled before 70 |
| Islamic option | RHB AITAB-i / Vehicle Financing-i | Public Bank Aitab Hire Purchase-i (via PIBB) |
| Early settlement (pre-HPAA conventional) | Rule of 78 + HPAA 2026 goodwill discount | Rule of 78 + HPAA 2026 goodwill discount |
| Early settlement (Islamic) | Mandatory Ibra' rebate | Mandatory Ibra' rebate |
| Branch network | 230+ branches; strongest East Malaysia + East Coast footprint | 260+ branches; densest peninsular Chinese-area + dealer footprint |
| Dealer pipeline strength | Moderate; strong in Sabah/Sarawak and Northern peninsula | Strong — Proton/Perodua/Toyota Klang Valley + Penang/Ipoh/JB |
| Bundled insurance partner | RHB Insurance | Etiqa (and other panel insurers) |
| Best for | East Malaysia buyers, post-HPAA reducing-balance hunters, existing RHB current/savings holders | Peninsular dealer-driven buyers, used-car buyers needing higher financing, pre-1-June flat-rate signings |
Source: RinggitPlus car-loan listings, RHB Banking Group auto-financing pages, Public Islamic Bank Aitab Hire Purchase-i product page, ABM HPAA 2026 press release. Verified May 2026. Final personalised rate depends on credit profile, employer, car model, dealer-tier, and tenure.
What the headline numbers hide: the rate gap in either direction is small — about RM 280 over 7 years on RM 80,000 — but the dealer-pipeline and geography signals are large. Most rate-comparison articles haven't updated for HPAA, so the post-cliff RHB advantage is genuinely under-reported. We updated.
Want to see your actual quote? The RinggitPlus form pulls personalised quotes from RHB, Public Bank, and 13 other lenders in one go — no CCRIS impact.
See your personalised car loan rate — no CCRIS impactWhat HPAA 2025 Actually Changes (and When)
The Hire-Purchase (Amendment) Act 2025 takes effect on 1 June 2026, with a transition period running to 31 March 2027. The Ministry of Domestic Trade and Cost of Living confirmed the date; the Association of Banks in Malaysia (ABM), AIBIM, and ADFIM are coordinating the industry rollout.
For new hire-purchase agreements signed from 1 June 2026: the flat-rate quotation method is replaced by reducing balance with an Effective Interest Rate (EIR) disclosure. The rate you see is the rate you pay against the outstanding balance — no more flat-rate-times-tenure illusion. This brings hire purchase into line with how mortgages and personal loans are already quoted.
For existing agreements signed before 1 June 2026: the original flat-rate / Rule of 78 contract terms continue. However, banks are introducing a goodwill discount at the point of early settlement, calculated to approximate what the outstanding balance would have been under reducing balance. The discount is not a fixed percentage — each bank calculates it based on your tenure, the timing of settlement, and the specifics of your agreement. Both RHB and Public Bank are participating.
The practical implication: if you sign in the next four days, you lock into the old method. The goodwill discount softens the worst of the Rule of 78 front-loading if you settle early, but the headline rate you're quoted is still flat-rate. If you can wait until 1 June or later, the new agreement is priced on reducing balance from day one — cleaner economics, no mid-life recalculation needed.
Where Public Bank Pulls Ahead (Before 1 June)
Two structural advantages put Public Bank ahead for pre-HPAA signings.
The flat-rate floor is 0.05 percentage points lower. Public Bank's 2.45% flat for new cars beats RHB's 2.50% flat. On an RM 80,000 / 7-year loan that's about RM 280 in total saved interest — small in absolute terms, but real. For most pre-HPAA buyers picking on rate alone, Public Bank wins.
The peninsular dealer pipeline is deeper. Public Bank's 260+ branches are concentrated in commercial areas with strong Chinese-majority small-business presence — and historically those branches built deep relationships with Proton, Perodua, and Toyota dealerships in the Klang Valley, Penang, Ipoh, JB, and Malacca. Walk into many independent or franchise dealers in those areas and the dealer's preferred bank finance officer is often a Public Bank rep. Your file is pre-screened on the dealer's premises; approval lands in 24-72 hours. RHB's dealer pipeline is solid but thinner outside the Northern peninsula.
Public Bank's used-car financing margin is also higher (up to 80-85% versus RHB's 80%) — small advantage, but reduces the down payment on a used purchase by RM 1,000-2,500 on a typical RM 60,000 used car. If you're buying second-hand on a tight cash position, the financing-margin gap matters more than the rate gap. Our Public Bank Car Loan review goes deeper on the dealer-pipeline mechanics.
Where RHB Pulls Ahead (On or After 1 June)
The cliff date flips the winner. Three reasons.
The reducing-balance floor is 0.13 percentage points lower. RinggitPlus lists RHB Vehicle Financing-i at around 3.18% p.a. reducing-balance versus Public Bank Aitab Hire Purchase-i at 3.31%-4.10% p.a. Under the new HPAA quotation method, RHB is materially cheaper at the floor — and the reducing-balance basis means the comparison is apples-to-apples with personal loans and mortgages. No flat-to-EIR maths needed.
East Malaysia and the East Coast are RHB territory. RHB has one of the densest branch footprints in Sabah, Sarawak, and the East Coast peninsular states (Kelantan, Terengganu, Pahang). For a car buyer in Kota Kinabalu, Kuching, Kuantan, or Kota Bharu, RHB's local relationship managers and East Malaysia vehicle valuation experience deliver a smoother experience than Public Bank's peninsular Chinese-area-weighted pipeline. RHB also handles East Malaysian-registered vehicles (including recond imports via East Malaysian ports) more comfortably — a real advantage if you're buying a Japanese recond through a Kota Kinabalu dealer.
The reconditioned-car rate is lower. RHB's recond floor at 2.60% flat undercuts Public Bank's 2.80% flat by 0.20 percentage points — and that's the larger of the two rate gaps in this comparison. If you're buying a 1-3 year-old Toyota Vellfire, Honda Vezel, or Mazda CX-5 recond, RHB is the cheaper structural choice regardless of the HPAA timing. Our RHB Car Loan review goes deeper on the East Malaysia and recond strengths.
Worked Example: RM 80,000 Over 7 Years
The number that decides most car loans is the all-in monthly instalment and total interest cost. We ran a typical RM 80,000 / 7-year scenario through both banks at the prevailing pre-HPAA flat rates.
| Cost line | RHB Hire Purchase | Public Bank Hire Purchase |
|---|---|---|
| Flat rate quoted | 2.50% p.a. | 2.45% p.a. |
| Effective Interest Rate (EIR) | ≈ 4.63% | ≈ 4.53% |
| Monthly instalment | ≈ RM 1,119 | ≈ RM 1,115 |
| Total interest over 7 years | ≈ RM 14,000 | ≈ RM 13,720 |
| Total cost (principal + interest) | ≈ RM 94,000 | ≈ RM 93,720 |
| Gap (PBB advantage if held to maturity) | ≈ RM 280 saved with Public Bank over 7 years (≈ RM 3.30/month) | |
| If settled at year 3 (Rule of 78) | RHB outstanding ≈ RM 57,100 | Public Bank outstanding ≈ RM 56,800 |
| If settled at year 3 (Islamic, with Ibra') | ≈ RM 4,000–5,500 saved vs Rule of 78 | ≈ RM 4,000–5,500 saved vs Rule of 78 |
| Post-HPAA equivalent (signed on/after 1 June) | ~3.18% reducing balance — lower floor | 3.31% reducing balance |
Indicative figures based on flat-rate quotation, pre-HPAA. Personalised rate depends on credit profile, employer, car model, dealer-tier, and tenure. Ibra' savings are illustrative — request a specific quote from the bank for your scenario.
The real lesson: the RM 280 Public Bank rate advantage is genuine but tiny — about RM 3.30/month. If you might settle early, that small rate edge is dwarfed by early-settlement mechanics; the Islamic version of either bank (RHB AITAB-i or Public Bank Aitab-i) saves materially more if year-3 settlement is realistic. If you can wait past 1 June, the post-HPAA reducing-balance picture flips the winner to RHB at the floor — a meaningfully cheaper headline rate, with no flat-rate sleight of hand.
Eligibility: Income, DSR, and the Real Income Floor
Public Bank's published minimum is RM 2,000 gross monthly income. RHB's effective floor for salaried applicants sits at around RM 2,500-3,000 — a small but real gap that reflects RHB's M40-T20 focus and stricter DSR screening for new-to-bank applicants. For self-employed buyers, both banks ask for RM 3,500-4,000+ gross with 6-12 months of business bank statements; RHB's bar is slightly higher on the documentation review.
The real gating factor at both banks is the Bank Negara Debt Service Ratio (DSR) cap, capped at roughly 60-70% of net income. Realistic income bands for common car classes:
- Perodua Axia / Bezza (RM 40K–55K): RM 2,500+ net at Public Bank; RM 3,000+ at RHB.
- Perodua Myvi / Proton Saga (RM 50K–75K): RM 3,000–3,500+ net, both banks straightforward.
- Honda City / Toyota Vios (RM 90K–110K): RM 4,500–5,500+ net, dealer relationship matters more.
- Honda Civic / Toyota Corolla (RM 130K–160K): RM 6,500–8,000+ net, banking relationship pricing kicks in.
- Luxury / continental / EV (RM 200K+): RM 10,000+ net or strong existing-customer status at the bank.
Public Bank tends to be marginally more lenient on borderline DSR cases for existing customers — branch relationship managers have more discretion, especially in Chinese-area branches where PB Gold/Visa Platinum and Public Mutual cross-holdings act as soft collateral. RHB's existing-customer signal is strongest for Premier/Privilege Banking holders and applicants with 12+ months of salary credits through an RHB current account. Outside those segments the algorithmic assessment dominates, and the income floor matters more than the relationship.
One eligibility note specific to RHB: applicants aged 50+ get assessed on "age at application" plus tenure capped to settle before 70. RHB has historically been more comfortable with mid-50s refinancers than some peers — relevant if you're refinancing your second car late in your career. Public Bank applies the same end-of-loan-by-70 rule but is slightly stricter on tenure for new-to-bank applicants over 55.
Insurance, Dealer Add-ons, and the Hidden Pricing Decision
Both banks bundle motor takaful or insurance into the hire-purchase package — RHB Insurance for RHB customers, Etiqa (and other panel insurers) for Public Bank. The bundling is convenient but it is a separate pricing decision masquerading as part of the loan.
The premium you see in the loan paperwork is not the cheapest available premium for your driver-and-vehicle risk profile. Comparison platforms like PolicyStreet or Bjak, or the insurer's direct quote, are often 10-25% cheaper for the same coverage. Take the bundled cover only as a year-one convenience to close the deal — then re-shop at renewal, every year.
Never let the dealer or branch officer roll the insurance premium into the loan principal. Paying flat-rate hire-purchase interest on a motor premium is the single most expensive line item in the package — over 7 years you can end up paying RM 800-1,500 in interest on what should be a one-year RM 1,500 premium. Always settle the premium in cash up front, or split it from the financing structure entirely.
The Verdict: Profile-by-Profile
Our Pick: Public Bank Hire Purchase for new-car buyers signing before 1 June 2026 on rate alone. RHB Vehicle Financing-i for buyers signing on or after 1 June 2026, recond/used-car buyers, and any purchase in East Malaysia or the East Coast.
1. Salaried RM 3,000-5,000, new Klang Valley peninsular car (pre-1-June): Public Bank wins. Lower flat-rate floor + dealer-pipeline depth in PJ/KL/Klang dealerships + RM 2,000 income floor (vs RHB's RM 2,500-3,000) makes the application the cleaner path.
2. Salaried RM 5,000-10,000, new car (post-1-June): RHB wins. Reducing-balance floor of ~3.18% vs Public Bank's 3.31% saves real money on a 7-9 year tenure; income comfortably clears RHB's floor; M40 segment is RHB's strongest customer profile.
3. Self-employed (gig worker, SSM-registered business): Lean Public Bank. RM 3,500-4,000 income floor is slightly more accessible than RHB's RM 4,000 floor, and Public Bank's branch network in Chinese-business areas correlates with thicker dealer-side know-how for self-employed files. RHB is the backup if Public Bank declines.
4. Civil servant (federal, state, GLC): Either bank works; relationship signal dominates. Whichever holds your salary account wins on speed. If neither, Public Bank's branch density at most Putrajaya/state-capital outlets is marginally faster than RHB's. The Islamic option matters more here than the bank choice — both banks' AITAB-i / Aitab-i products give Ibra' on early settlement, fairer than conventional Rule of 78.
5. Age 50+ refinancing or second-car buyer: RHB wins. RHB's age-at-application assessment is historically more accommodating for mid-50s and early-60s borrowers than Public Bank's stricter age-tenure interaction. Worth checking with both, but RHB is the higher-confidence pick.
6. Reconditioned-car buyer (Japanese imports, ≤5-year-old): RHB wins on rate (2.60% flat recond vs Public Bank 2.80%) — a 0.20 percentage-point gap that's the largest in this comparison. AmBank is worth a third quote for recond specifically; see our best car loan Malaysia panel for the full benchmark.
7. Multi-vehicle household / fleet buyer: Public Bank's relationship pricing tends to be more generous at the second or third vehicle if you hold PB Gold/Visa Platinum or Public Mutual investments — a small but real discount on the second car. RHB's Premier Banking has equivalent logic but a higher relationship-asset threshold (typically RM 250K+ AUM). For most households, Public Bank wins; for high-net-worth multi-vehicle owners, RHB's Premier pricing is competitive.
8. Dealer-driven first-time buyer (let the dealer handle everything): Whichever bank the dealer recommends, and you have any banking relationship with, wins on speed. Across most peninsular dealerships, Public Bank's bench depth means the dealer's preferred officer is more often a PBB rep. In East Malaysia and East Coast dealerships, the same logic applies in RHB's favour. Don't let the dealer be your only quote — pull a RinggitPlus comparison as a sanity check on the rate they offer.
For a wider panel, our best car loan Malaysia roundup compares RHB, Public Bank, Maybank, CIMB, Hong Leong, and AmBank head-to-head. The sibling Public Bank head-to-heads cover the other two cluster-king pairings: Maybank vs Public Bank and Public Bank vs Hong Leong. For single-bank deep dives see the RHB Car Loan review and Public Bank Car Loan review.
Whichever profile fits you, the RinggitPlus aggregator pulls live quotes from both RHB and Public Bank in one form — no CCRIS hit, no commitment, about 2 minutes.
Get your personalised car loan rate — 2 minutes, no CCRIS impactFrequently Asked Questions
What is the actual interest rate difference between RHB and Public Bank car loans in 2026?
On the pre-HPAA flat-rate basis (still applicable for hire-purchase agreements signed before 1 June 2026), Public Bank quotes from 2.45% flat (≈4.53% EIR) and RHB from 2.50% flat (≈4.63% EIR) for new cars — a 0.05 percentage-point gap that translates to roughly RM 280 in extra interest on an RM 80,000 / 7-year loan. Under the post-HPAA reducing-balance method that takes effect on 1 June 2026, RinggitPlus listings show RHB Vehicle Financing-i at around 3.18% p.a. versus Public Bank Aitab Hire Purchase-i at 3.31%-4.10% p.a. — RHB is the cheaper reducing-balance floor by 0.13 percentage points. The winner literally flips on the HPAA cliff date.
What changes for RHB and Public Bank car loans on 1 June 2026?
The Hire-Purchase Amendment Act 2025 (HPAA) takes effect on 1 June 2026, with a transition period to 31 March 2027. New hire-purchase agreements signed from 1 June 2026 must use the reducing-balance method together with an Effective Interest Rate (EIR) disclosure — the flat-rate plus Rule of 78 early-settlement formula is abolished for new contracts. Existing agreements remain on Rule of 78 but become eligible for a goodwill discount on early settlement, calculated to approximate what the outstanding balance would have been under reducing balance. Both RHB and Public Bank are participating in the Association of Banks in Malaysia industry initiative.
RHB vs Public Bank — who has the bigger dealer network?
Public Bank's 260+ branches and decades-old relationships with Proton, Perodua, and Toyota dealerships give it the deepest dealer pipeline of any private Malaysian bank, particularly in Chinese-majority commercial areas like Penang, Ipoh, JB, and Klang Valley. RHB's 230+ branches sit slightly below in raw count but its East Malaysia footprint is denser — Sabah, Sarawak, and the East Coast peninsular states see proportionally stronger RHB presence than Public Bank, and RHB's regional banking roots mean its branches handle locally-registered and recond-import vehicles more comfortably. If you're buying through a peninsular Chinese-area dealer, Public Bank's pipeline is faster. If you're buying in Kota Kinabalu, Kuching, Sandakan, or Miri, RHB's local relationships are the smoother path.
RHB Easy Car Loan — is it different from regular RHB Hire Purchase?
RHB Easy is RHB's digital-first onboarding brand (RHB Easy App, RHB MyFinB2B portal for dealers), not a separate product. The underlying hire-purchase facility, rates, and Shariah option (AITAB-i) are the same as RHB's standard Hire Purchase. The Easy App lets existing RHB customers get an indicative rate and upload documents digitally, but final approval and the signing visit still typically run through a branch or the dealer. For self-employed applicants, the Easy App pre-screening is faster than walking in cold, but the income documentation requirements (6-12 months business bank statements, SSM, latest LHDN B-form) are identical to a branch application. Public Bank's PBe online channel covers a similar use case for existing PBB customers.
Rule of 78 vs Ibra' rebate — which is better for early settlement?
The Ibra' rebate used in RHB AITAB-i and Public Bank Aitab Hire Purchase-i is mathematically fairer for early settlement than the Rule of 78 used in conventional hire purchase. Rule of 78 front-loads interest charges — the first year of a 7-year loan absorbs roughly 25% of total interest, falling to 1.5% by year 7. So if you settle in year 3 of a 7-year flat-rate conventional loan, you've already paid most of the interest and the rebate is small. Ibra' returns the unearned profit on the remaining tenure, calculated on a basis that approximates reducing balance — typically RM 3,000-8,000 of additional savings on an RM 80,000 loan settled in year 3. From 1 June 2026 the gap closes for new conventional loans because they too move to reducing balance, but the gap remains for any agreement signed before that date.
What is the minimum income for an RHB or Public Bank car loan?
Public Bank publishes a minimum gross monthly income of RM 2,000 for hire purchase. RHB's effective floor for salaried applicants sits slightly higher at around RM 2,500-3,000 gross — a reflection of RHB's M40-T20 focus and stricter Debt Service Ratio screening for new-to-bank applicants. For self-employed buyers, RHB typically asks for RM 4,000+ gross with 6-12 months of business bank statements; Public Bank is similar at RM 3,500-4,000. Below RM 2,500, Public Bank is the more accessible of the two. The real gating factor at both banks is the Bank Negara DSR cap (roughly 60-70% of net income), not the headline income floor. Realistic income bands by car class are covered in the eligibility section.
Should I sign a car loan before 1 June 2026 or wait until after?
If you have a strong existing relationship with Public Bank and need to sign before 1 June 2026, Public Bank's 2.45% flat is the cheapest of the big-bank conventional flat-rate options open to you and the cluster's safest pick. If you can wait until on or after 1 June 2026, RHB Vehicle Financing-i (3.18% p.a. reducing-balance) is the cheapest big-bank reducing-balance floor in the post-HPAA panel — and the reducing-balance method means the rate you see is the rate you pay, with no flat-to-EIR translation. The HPAA transition runs until 31 March 2027, so banks may continue Rule of 78 quotes during that window — but the underlying product economics are better post-cliff. Unless you're locked into a delivery date, wait.
RHB Insurance vs Etiqa — should I take the dealer-bundled cover with my car loan?
Both RHB and Public Bank typically offer to bundle motor takaful or insurance into the hire-purchase package — RHB Insurance for RHB customers, Etiqa for Public Bank (and historically other Maybank-group panels). The bundling is convenient but it is a separate pricing decision. The premium you see in the loan paperwork is not always the cheapest available premium for your car-driver risk profile — comparison platforms like PolicyStreet, Bjak, or the insurer's direct quote can be 10-25% cheaper for the same coverage. Take the bundled cover only as a year-one convenience, then re-shop at renewal. Never let the dealer or branch officer roll the premium into the loan principal — paying interest on insurance is the single most expensive financing decision in the package.
Last updated: May 2026. Rates and product details verified from RinggitPlus car-loan listings, RHB Banking Group auto-financing pages, Public Islamic Bank Aitab Hire Purchase-i product page, and Association of Banks in Malaysia HPAA 2026 press release. Always confirm your personalised rate with the bank before signing.