Buying a car in Thailand.
For years, there have been certain things that I dread the most: having a root canal, getting an IRS audit, and buying a new car. These things are all very painful, keep me awake at night and stress me out. So now I am in the situation of buying a new car in Thailand, and I was dreading it. But I learned something: the system for buying a car in Thailand is different than in the US, and is a lot less of a painful process, but can hit you in the pocket book much harder.
When buying a new car in the US the sales guy will be sticking next to you, like it or not, for the entire time while you are visiting the dealership, making it extremely difficult to talk privately with the wife or whoever you brought for protection. The sales guy is trying
too hard to be your friend. He is a shark.
In a car dealership in Thailand, each car has a price, and there is a big tag on most of them with the exact full cost. No extra dealer mark ups, just the price. When you pop into the showroom, you are not pounced on by any slick sales guy looking for a commission. You just look around and look at the price, and when you have a question, you simply walk up to the sales counter and ask. Most of the sales people are young ladies smartly dressed flashing you a nice Thai smile. And certainly no required handshake.
But one thing with buying a car in Thailand — it is much more expensive than in the USA. This is one area where the Thai government takes taxes, and takes a lot. I guess it is OK, however, since we don’t have property taxes and a lot of other taxes that are common in America, but it is a bit of a shock when the cheapest (no options, small engine) Toyota Camry starts at $46,500 USD. That compares to a little over $22,000 to $24,000 USD for the same car in the US. Talk about sticker shock!
If you want the current Thai price list for new cars, it is at this link: ThaiCar.com.
Cars in Thailand are either imported or made in Thailand. Imported cars in Thailand have a government tariff of 300% (that is not a typo — that is three hundred percent tax on the manufacturers cost). Sometimes it is higher for a luxury imported car, like a Porche. So a nice German made Mercedes or a fine Japanese made Lexus will be priced somewhere in outer space. Fortunately, a lot of good cars are made right in Thailand today, including Honda, Toyota, Chevrolet and Nissan and that tax penalty can be avoided.
After a lot of looking and thinking, my wife and I decided to buy a Honda CR-V. Since the model year is sort of nearing an end, the dealerships are a little short of current year cars, so we are getting the actual car that is in the dealer showroom, and they are throwing in some extras because of that. Our cost was a little over $41,000 USD. Dealer prep work is now being done, and we will get our car next week.
Shopping for a Car
One of the great pastimes in Thailand is going to the shopping malls. The malls are modern, usually have entertainment, lots of restaurants and, of course, lots of shops. They also have one or two or three car manufacturers with a display of their newest products. You can get all the info you need right there at the shopping mall, and the sales people are usually very attractive young ladies. You can sit in the car, get all the pricing, and hear about any particular car that may have a special factory promotion.
One important point for those that live in Bangkok. If you live in this city, it is my opinion that you never buy a car. You won’t need it, as there are plenty of cheap, terrific taxis everywhere in the City, plus lots of other good public transportation. Driving in Bangkok yourself would be absolutely frightening, frustrating and a total waste of your time. Your car would likely be soon wrecked or stolen, and it may even kill you. Traffic is horrendous in Bangkok, maybe the worst in the world. If you live in Chiang Mai or any other Thai city away from BKK, you will need your own transportation — either a motor bike or car — or you will find everyday life very tiring.
At the dealership, you are able to take a test drive, and look over the car carefully in the showroom. If you need financing, there is usually a special bank-like office in the back of the showroom.
Once you have agreed on purchasing a car, the dealership usually gets the paperwork done for you. Your car will be given a special Red Color license plate for temporary use, and later you will get your regular plate delivered to the dealership.
Let’s assume you’ve just bought your car or pickup & you’re at the dealers. You will no doubt be aware that it has a set of red license plates. This is because it has yet to be registered at the transport office. And until it does you are limited as to where & when you can travel with the car. You’ll also be given a brown book to go along with the red plates.
Inside the brown book, provision has been made for you to do your trip reports. It’s unlikely that the dealers will explain the use of the brown book to you, other than you must keep it in the vehicle at all times, along with a copy of your insurance details.
If you travel outside of your local, then you’re required by law to state where you are going, what time you leave, what time you arrive, when you’re coming back & the actual time you arrive back. Failure to comply with this requirement leaves you open to a spot fine of 1k.
And it’s unlawful to drive your vehicle after about 10pm at night, unless you have special dispensation from an office at the local transport office.
After a couple of months, you’ll get a proper set of license plates. Then you’ll be able to get the 2k deposit you paid on the red ones back.
A Little Special Story on the Red Plate: a few years ago, I bought a new Mitsubishi sedan from a big Mitsubishi dealership in Bangkok, and they put on the red plate. About a week later, I was stopped at a police checkpoint on the super highway between Bangkok and Chiang Mai. It seems that the red plate given to me by the dealership was a fake, something they made in their own back shop instead of getting it from the DLT or Department of Land Transport Office. The police did not cite me, but I went back to the dealership and had to confront them about their little scam. Just a little word of caution that scams are everywhere in Thailand, so you have to be vigilant.
If you are an expat and putting the car in your name, you will need a copy of your passport with an appropriate visa and a work permit, or in lieu of the work permit you can use a Letter of residency issued by your Embassy (or Consulate), Letter of residency issued by your local Thai immigration office, or Foreigner issued house registration document (the yellow tabien baan).
If you are buying the car outright, you will be given a Blue Book, which is your car registration. If you are buying with a car loan, the dealership will keep the Blue Book until the loan is paid off.
Unlike the US, used cars in Thailand retain their value (or perhaps the real story is that used cars are just priced too high). A fairly new used car of the current year will be somewhere between 95-98% of the full dealer price for the same model from the factory. Even clunkers are expensive, and you won’t see ten year old cars less than $10,000 USD. There is little wheeling and dealing with used cars. So unless you really want a particular model of a particular year, it pays to simply buy new. At least you can trust that the mileage (kilometer-age) is real.
Bringing your old US car from America will not work, as Thailand will slap the same super high tax on the importation of used cars as well. They even do it for car parts, because in the past some savvy people would bring in the car to Thailand in parts, and then put it back together in-country to avoid the tax.
When you buy a new car, you may get your insurance thrown in with the price of the car. That covers personal injury and collision, and this is very common.
But if you don’t have insurance thrown in, you will find car insurance in Thailand is pretty reasonably priced, and there is no point system from tickets that makes the price higher, like in the US (anyway, there are not too many tickets issued in Thailand that are not handled on the spot with cash).
Because there are a lot of uninsured motorists in Thailand, it is wise to buy full coverage to cover any situation. It’s fairly cheap, so go ahead and over-insure. The insurance market is very competitive and there are lots of insurance companies. Make sure you get one with a 24-hour hotline in English.
Your cost will be based on how many claims you have had with insurance companies, and most will consider claims made (or no claims made) in your home country. If there were no claims, you will be getting a substantial discount. If you have received a no-claims discount for car insurance in your home country, you have a high probability of receiving the same discount (or better) from your Thai car insurance. A translated confirmation of the insurance policy is sufficient.
So now, we are just waiting for the delivery of our new Honda CR-V and are very excited. Off on the road again. If you have had experience buying a car in Thailand, please share your tips in our comments for the world to see.
Thailand takes their TV commercials for cars quite a bit more seriously than in the US. Following is a typical over-the-top Thai TV commercial for a Toyota.