Expats bringing in a used car into Thailand. Is it worth the effort?

Traffic BKK 2In Chiang Mai and many other Thai cities you really have to have your transportation unless you are living right in the center of town.  The more desirable living areas of Chiang Mai are about 10 to 20kl. out of central Chiang Mai, and you need to have something to get around for shopping or doing just about anywhere.  Public transportation outside of the downtown area in Chiang Mai is not very dependable nor frequent.

Bangkok living is much different where I think it is not wise to do any driving.  Streets are totally chaotic in Bangkok, and you can’t get very far in your vehicle anyway.  Fortunately, public transportation in the “Big Mango” is pretty darn good, with Skytrains, taxis everywhere, buses, tuk-tuks, the underground train, and the ever thrilling Motorcycle Taxi.  Outside of Bangkok, you had better find your own way of getting around, however.

The minimum an expat would need is a motor scooter, and they are not expensive to buy or rent.  New 125CC bikes that are automatic and easy to drive cost around USD $1500, or rent for about USD $125-150 a month.  But not everyone is right for a motor scooter, including yours truly.  It does have a sense of danger everytime you hit the road (thanks to the driving skills and habits common in Thailand), and it is not a lot of fun if it rains (which it is known to do quite often in this little tropical paradise).

Traffic BKKCars are expensive in Thailand, both new and used.  Used cars are usually almost twice the cost as in the US, and new cars are at least 150% of the US price and sometimes higher.  A new Honda CRV that I bought in Thailand for the equivalent of USD $42,000 was available with the same options in the US for a little over $28,000.  That’s because of very high import taxes on cars, and even cars made in Thailand are high because there are not enough of them made to cover the market.

To save money (perhaps) and because an expat may have a car they really love back home, many have considered bringing in their car from the US.  It can be done, but it can be a minefield to maneuver through, and it is important to have all the facts on hand before jumping in the soup and shipping that great little machine to Thailand.

Foreign-made vehicles permanently imported into Thailand are generally subject to very heavy taxes and duties.  Used vehicles are regarded as restricted goods and, therefore, generally not allowed for importation into Thailand.

An expat importer (an “importer” is anybody that wants to bring their homeland car into the country) must be granted special clearance to import a used vehicle and will need to obtain an “Import Permit” from the Ministry of Commerce.   You have to obtain this Special Clearance before the car arrives in Thailand or you will be subject to a hefty penalty.

Import Taxes & Duties

Thailand does not have a lot of the taxes that are in the US (the “tax everybody for everything” country), so they make up for it a bit by taxing some things extremely high.  One of these would be with import taxes for cars and motorcycles (the same applies to both).

Discounts on the custom duties are possible if the importer can qualify in one of two groups:

  1. A Thai citizen returning home from overseas can be exempt from import taxes for one car If they meet some minimum requirements:
    1. They have had to live overseas (like in the US) for a minimum of two years, and
    2. Owned the car for at least one-and-half years.
    3. If they are married to a foreigner they are required to present documentary evidence of marriage and proof of changing residence to Thailand.
  2. An expat with a resident visa (like a retirement visa) can be exempt from the taxes if:
    1. Their visa is good for at least one year, and
    2. Have owned the vehicle for at least one-and-a-half years.

There are extensive documents needed to bring in a used car:

  • An Import Goods Declaration and 3 duplicates;
  • A Bill of Lading or Air Waybill;
  • Proof of vehicle purchase (if any);
  • A Release Order (Kor Sor Kor 100/1);
  •  An insurance premium invoice;
  •  A House Certificate and an Identification Card;
  • A passport in case of changing residence;
  • A Vehicle Registration Certificate indicating that the imported vehicle was used abroad;
  • An import permit from the Foreign Trade Department of the Ministry of Commerce.

Once you have all your ducks in a row, you can get a discount on the customs duties and taxes ranging from 21.67% (for cars owned for 1.5 years) to 70% (for cars owned 10+ years). That discount is taken off taxes and duty fees which are figured by the value of the car (which is determined by the customs official at the place of pick up in Thailand).

There are four charges by the Thai government for bringing in a used car to the country (be prepared for a bit of a shock here):

  1. The customs duty is 80% of the value of the car, plus
  2. An Excise Tax of 35% (for cars that are 2400cc or less) to 48% (for cars that are more than 3000cc or more than 220 horse power), plus
  3. An “Interior Tax” of 10%, plus
  4. A VAT (value added tax) of 7%.

The discount mentioned above for qualifying permanent residents and Thai nationals can reduce these taxes, but even with those discounts, they are still very high by anybody’s standards.

Then in addition to all of these taxes, you still have to pay for the Shipping Charges.  This can vary greatly and it is important to do a lot of comparison shopping.  I just had one of my blog readers get a price quotation for shipping a car from Houston to Bangkok for a cost of $2500.  That by itself is not too bad.  From my old San Francisco Bay Area home, I just got a price quotation for shipping a car to Bangkok of just $1550. from Cardinal Moving Systems.  That’s much lower than I expected.

An Example

Just to put these charges in perspective, we will try out these numbers on a hypothetical vehicle: a three year old Toyota Camry that you bought a year and half ago for $15,000.  It is worth a little less since you would have owned it for awhile, so we will say it is now worth $12,000 in the US used car market.

Here is the breakdown of what this particular car will cost to bring to Thailand:

  • Value of the car                                                $12,000
  • Shipping:                                                              2,500
  • Customs Duty (80%)                                           9,600.
  • Excise Tax (35%)                                                 4,200.
  • Interior Tax (10%)                                                 1,200.
  • VAT Tax (7%)                                                           840.
  • Discount (Thai person or Permanent resident expat) – owned 3 years – 36.67% off taxes and duties                                                  -5,808.
  • Total cost for the car:                                      24,532.

Here is another very important point that may make the taxes in the above example much larger than what is shown here The customs official values the car (for the basis of the taxes) at the market value of the car in Thailand, not the value in the US.  That will be higher in every conceivable situation.  The car may have a value in the US of $12,000, but in Thailand it may be $20,000, which would then increase the tax and duty amounts accordingly, going up in this case by another 75%!  That would make the total cost of this car going to Thailand well over $30,000!

And then it doesn’t stop there you won’t be able to get a license for the car unless changes are made to it to conform to Thai vehicle law.  And then, of course, there is the actual cost of getting a license plate for the vehicle.   I think you need to think conservatively that this will be another USD $1000.

Changes necessary to be made to the imported car into Thailand

Cars in the US have the steering wheel on the right side of the car looking back from the hood.  In Thailand, it is the opposite.  You are allowed to drive a car with the steering on the other side, but it can be very uncomfortable the way streets are configured (which are also on opposite direction from the US).  This shows up a lot when passing another vehicle as it leaves a very big blind spot for the driver.  So there is a good chance you can wipe out this massive investment the first time you try and pass an overloaded  truck full of Durian.

Headlights in Thailand are dimmer, so the lamps of the US car have to be changed for the lower power lamps.

Car dealers in Thailand are under no obligation to assist you with your own imported cars with spare-parts and service and usually provides service and parts only for the cars imported by the general car brand distributor in Thailand.  So you can’t go to the Toyota dealer in Thailand and expect any help with your imported Toyota you bought in America.  You are likely to have to resort to later importing car parts into Thailand.  While a part may look similar in both places, there are usually small differences in measurements and because the steering wheel orientation is different.  And understand that the import duties for car parts are the same as for cars, which is very high.

Shenanigans

TIT – This is Thailand, so is there any way around this mess?

If you were somehow appointed to the diplomatic corp (Obama would say the Diplomatic Corpse), you can get complete exemption from the fees and taxes while you are working at the Consulate or Embassy (another privilege for the bureaucrats — sorry to sound so cynical).

There have been stories — only anecdotal material mind you — that some people ship a car to Singapore, then drive through Malaysia into Thailand, and once in Thailand, re-register the car to a Thai national.  That may take a little grease for the gears of government which is not uncommon in Thailand.  This plan or idea is not officially recognized or verified by me, but I have heard through the grapevine that it worked for some.  Also I have heard directly from some that have imported the most expensive cars possible (RR) into Cambodia that it is not difficult in that country.  Not sure how it can come from Cambodia to Thailand, however, and maybe it cannot be done.

There is something in life called the “Hassle Factor”, and getting a car into Thailand has an enormous Hassle Factor.  That has a value as well, and a real cost of time and frustration, and this should be a major consideration for anyone thinking of doing this.

edselIs it all worth it?

  In my opinion, No.  No in the strongest terms.

When you come to Thailand and buy a car that you know is so much more money than the same car back home, just keep reminding yourself that there are no property taxes on homes.  And there are a lot of other taxes you pay back home that no one knows about here. That will make it a little easier to swallow.

UniTEFL banner_468x60

 

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

 

book making money in Thailand Godfree 2


One thought on “Expats bringing in a used car into Thailand. Is it worth the effort?

  1. Thanks Greg, just the information we had been looking for. We will not be bringing our Rav4 to Chiangmai.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>