Think it’s expensive owning a car in Australia? It can be – especially if your car qualifies for the Luxury Car Tax. But there are other countries where every car is treated like an Australian luxury car – and taxed the same way. There are also countries where car ownership is made artificially expensive in order to limit the amount of vehicles on the road. Here’s an overview of some of the most expensive places to own a car – as an expat or as a native.
In some cities in China, including Shanghai, Beijing, and Guangzhou, a license plate can cost more than the car itself. To limit congestion and air pollution, city governments impose a strict quota on the number of car registrations it will give out in a given year. The registrations are auctioned off every year in a lottery system, and can cost thousands more than the car itself. Many people who could otherwise afford a lower-end car have to forego ownership because they can’t afford the registration.
The most expensive place in China to own a car is Shanghai; Guangzhou offers a limited number of free registrations to people who own more environmentally friendly cars.
Many automobile brands in Brazil cost more than they would in other countries; entry-level cars in Brazil can often cost double what a consumer would pay for them outside of the country. There are complicated reasons for this; one of the most obvious is that vehicle taxes in Brazil are extremely high. Brazilians pay upwards of 36% taxes on the purchase price of all cars, while (for example) consumers in the United States pay about 6.1%; the Luxury Car Tax in Australia is as much as 33%, but is only applied to high-end cars worth over $61,884 (or $75,375 for fuel-efficient cars).
You would think that many people would import cars from other countries to get around the high purchase taxes in Brazil; however, import duties can cost as much as 35% of the car’s purchase price, in addition to other taxes and fees; by the time all of these tariffs are collected, the car can end up costing almost triple its original purchase price.
On top of these costs, the Brazilian government charges a yearly tax based on a percentage of the car’s estimated value – the estimate is always on the high end – that can add up to hundreds or even thousands of dollars every year.
In Cuba, the government controls the sale and pricing of new cars, and up until recently the purchase of cars was strictly regulated by government permits, which were given out only to a lucky few.
However, in January of 2014, the government abolished the permit system and allowed anyone to buy a foreign car – with a significant mark-up. A Peugeot 508, for example, which is listed at a price of $29,000 on the company’s website, costs upwards of $262,000 in Cuba. The government claims that the mark-ups it collects on foreign cars will go toward funding for public transportation.
Buying a used car or importing one from abroad won’t save you any money in Cuba. Up until recently, used cars could only be bought and sold illegally; there was no way to legally transfer car ownership for any vehicle built after 1959. Even now, used cars can cost tens of thousands of dollars more than they would anywhere else in the world. If you’re lucky enough to get government permission to import a foreign car, prepare to pay a 100% import tax.
The United Kingdom
The UK’s car market is a bit unique because, unlike most other countries in the world, their cars are right-hand drive. This makes importing foreign cars next to impossible. Car prices in the United Kingdom are as much as 52% higher than they are in Continental Europe. While it’s still possible to find a good deal on a used car in this market, however, tariffs and insurance bring the cost up to significantly more than buyers in other countries often expect to pay.
The government in Singapore, in an attempt to reduce congestion, has numerous measures in place to actively discourage car ownership. These include high taxes, Electronic Road Pricing, the Certificate of Entitlement, and the Vehicle Quota System.
If you want to own a car in Singapore, first you must bid for a Certificate of Entitlement. A limited number of these are made available each month for bidding, and if you get one, it will last ten years from the date of the car’s registration. Bidding is competitive and prices are extremely expensive.
There are a variety of taxes in Singapore that raise the cost of both imported and local cars even more. Try to import a car, and you’ll need to pay a customs duty of 41%, as well as a registration fee that can cost $1,000 or more. All new and used cars, either imported or local, must pay another registration fee of 150% of the car’s open market value.
Electronic Road Pricing is a scheme aimed at reducing traffic during peak periods, in which drivers are charged a certain amount for driving at certain times of day or hours. In addition, road taxes are due every six months to once a year; this increases significantly every year your car ages, particularly after its tenth year. The road taxes can cost as much as 150% of the car’s value after its 15th year. Without even factoring in insurance and fuel, this makes Singapore one of the more expensive places in the world to own a car.
It’s not always cheap to own a car in Australia but it could be worse. You could be stuck in a country where even broken-down cars are a luxury good, and priced accordingly—or one where traffic is so bad that the government has to levy high taxes and fees to limit the amount of congestion. If you’re planning on moving abroad anytime soon, do some investigation into the cost you can expect for buying or importing a car and at least you won’t be surprised.