In Thailand, purchasing a new car is expensive. Many locals and ex-pats would agree on this and are always surprised at the cost when these cars are compared with similar makes and models in other American or European markets.
In some parts of Thailand, public transportation systems cannot be relied on. Places such as Bangkok and other major cities and towns have MRT, BTS, songthaews, local buses, and van networks. These transportation systems are good and very effective but tend to be inadequate for the city’s needs and are only available for people living or finding themselves in the central zone.
Cars in Thailand fall under two categories; imported cars and domestically produced cars. Between both, imported cars cost way more and this is because the government of Thailand has levied high import duties and taxes on all imported cars in an attempt to protect the domestic auto industry. Not just Thailand but other countries such as Malaysia, China, India, and Singapore have adopted this same exercise on duties and taxes, some to an even greater length.
Currently, it will cost between 187 – 328 percent in import taxes to import a brand new car to Thailand, this depends on the importation kit, power, and engine size of the car. Cars with engines smaller than 2,000cc and produce less than 220 horsepower are taxed lesser compared to cars with bigger engines above 3,000 cc with a horsepower above 220.
Despite the increase in duties and taxes, the demand for imported cars in Thailand is high and has become the new normal even for manufacturers to dismantle their vehicles and import them in parts only to be reassembled in Thailand by local workforces in an assembly plant. In the industry, this practice is known as CKD (Complete Knocked Down). The alternative for CKD is the CBU which stands for Completely Built-Up, this means that the car is fully assembled and imported – this usually costs more. However, this practice is responsible for creating local jobs, same time encouraging well-known foreign auto manufacturers to put up reassembling plants in Thailand.
When reassembling CKD imported vehicles, auto manufacturers who utilize local content are subjected to local content laws – these laws exist in virtually every developing country. The number of local contents used when assembling vehicles depend on the type of Kit (CKD/CBU) and availability of recognized locally sourced parts. The more imported source parts, the lesser the local content, which results in higher import duties which affect the overall cost of the vehicle. And not to mention, the cost of labor. Cars assembled with more locally sourced contents and lesser imported sourced parts tend to be moderately expensive, however, local content suppliers are typically inefficient compared to global suppliers, and because of this, the costs of these parts go up.
In general, the taxes these giant manufacturers get charged to run their businesses in Thailand is enough explanation as to why cars are insanely expensive in Thailand.
How Can I Buy Cheap Cars In Thailand?
Because cars in Thailand are quite expensive you must be wondering if there are ways to get them for lesser or affordable prices. Well, you are in luck because there is but one way to buy cars in Thailand at affordable rates.
Buy used cars. Although used cars come with the benefit of a cheaper set of wheels, generally their value is highly perceived and could still cost more compared to getting used cars in western countries.
Used cars can be gotten from individuals willing to sell theirs, but the best option would be to buy from licensed car dealers as this is safer and in some cases could increase your chances of getting insurance or service packages.
Maybe you live in an area such as Chonburi, Chiang Mai, or Phuket where sky trains and subway lines are still a distant dream. Or maybe you live in the central zone, but because of all the disadvantages that come with using public transportation systems, you may have felt the need to own a car or two, but reality sets in, and you realize purchasing a car in Thailand is quite expensive, and then you can’t help but wonder why? Why so expensive even when most of the top car brands are manufactured in Thailand, brands such as Honda, Toyota, Chevrolet, and a lot more.
