We all know that cars are expensive, but many people don't know how much it really costs to own one. While many people think that fuel is the only cost to worry about, there are actually more factors to consider when owning a car in Bangkok. From maintenance to insurance, hidden costs can creep down on you.
Registration and Taxation
Committing to owning a car in Bangkok means that you have to constantly renew your registration and pay the car tax every year, as per the provisions of the 2522 BE Land Transport Law. The tax rate for cars in Thailand is calculated based on the size of the engine (cubic centimeters).
Cars with an engine displacement of 600 cc or less are taxed at a rate of 0.50 baht per cc. Engines between 601 and 1,800 cc are taxed at 1.50 baht per cc, while engines above 1,800 cc are taxed at 4.00 baht per cc. If the car is registered in the name of a legal entity, the tax rate is doubled according to the prescribed rate.
Cars that have been registered for more than five years can enjoy tax deductions based on the number of years after registration. 10% in the sixth year, 20% in the seventh year, 30% in the eighth year, and 40% in the ninth year. Vehicles registered for ten years or more are eligible for a substantial 50% tax deduction.
But keep in mind that cars that are more than seven years old from the date of registration must comply with other regulations, such as inspections conducted by government certification bodies. The tax collected by the government is used to build and improve various roads. The above rates and deductions apply to seven-seater cars. If your vehicle has more seats or as a public transport option, a different calculation applies.
Other costs related to car registration and taxes
In addition to the regular tax on car registration renewal, there are several other fees that need to be paid. When renewing online, there is a mail delivery fee of 40 baht. If you choose to use the Tor Ror Or checkpoint, there is an additional fee of 100 to 200 baht. If an inspection is required, the cost may be between 200 and 300 baht.
Failure to hold an up-to-date registration label may result in a fine of approximately 2,000 baht per violation. Also, if your car tax has been overdue for more than three years, you must re-register your car license plate with the DLT (Ministry of Lands and Transport).
Interest on the loan
When buying a car, most people rely on a car loan for financing. A key component of applying for a car loan is the interest rate associated with it. The interest rate is determined by the bank and may vary according to its terms and conditions. In Thailand, car loan interest rates typically fall by 3% to 8% per year.
The percentage represents the amount you have to repay on top of your initial loan amount. Therefore, it is crucial to carefully evaluate the financial aspects before deciding to buy a car. Not considering interest rates could lead to higher overall costs in the long run.
The cost of insurance
If you own a car or motorcycle in Thailand, you must purchase mandatory third-party liability insurance, also known as Por Ror Bor, under the Road Protection Act. This insurance is mandatory and needs to be renewed annually.
Por Ror Bor provides basic coverage for deaths and injuries caused by road accidents. The minimum coverage includes up to 30,000 baht per person for medical expenses in case of injury and up to 35,000 baht for medical expenses in the event of death or dismemberment. However, if you are not at fault in the accident, the coverage increases significantly.
In this case, the coverage for injury is 80,000 baht and for death or dismemberment is 250,000 to 500,000 baht. In addition, the daily hospitalization allowance is 200 baht for a maximum of 20 days. Although Por Ror Bor offers comprehensive coverage options, its fees are still very affordable. For the typical car owner in Thailand, the annual premium for this insurance hovers around 650 baht.
Private insurance
It is worth noting that Por Ror Bor alone may not provide adequate coverage. Private insurance can provide additional benefits such as theft, third-party property damage, and accident coverage.
In the Thai insurance market, there are five categories of private car insurance. These include Type 1, Type 2+, Type 2, Type 3+, and Type 3. Type 1 insurance is the most comprehensive and expensive, making it perfect for a new car as it covers all your problems. Type 3 insurance, on the other hand, is more affordable but only covers third-party liability and injuries. The cost of private car insurance ranges from 3,000 baht to more than 20,000 baht. It depends on the type you choose and the level of coverage you want.
Service and maintenance costs
An important factor to consider when owning a car is the cost of service and maintenance, which is often overlooked. Typically, maintenance is required every 10,000 km, and the average cost is around 2,000 baht per visit. During these service appointments, various components such as air filters, oil filters, and batteries are routinely inspected.
In addition, tyres need to be replaced every 2 to 3 years or after reaching 50,000 km. These fees tend to vary depending on the age of your vehicle and how often you drive. As your car ages, expect maintenance expenses to increase due to wear and tear issues. Additionally, if your vehicle is no longer warranted, you may also need to save money on repairs, as unforeseen problems can arise at any time.
depreciation
Many new car buyers don't realize that once their vehicle leaves the dealership, its value drops immediately. Unlike assets such as apartments or gold, which can increase in value over time with upgrades or market fluctuations, cars typically only depreciate in value due to wear and tear with regular use. This essentially means that you will lose money over time.
In the first year alone, depreciation is typically 10% to 20% of the initial purchase price. It varies based on factors such as brand reputation and market demand. To gauge how much your car is depreciating, consider comparing your current resale offer for your particular make and model to the price you originally paid.
Average monthly fuel costs
Another hidden expense to consider when owning a car in Bangkok is the average fuel cost. If you drive every day, your monthly fuel cost can be between 1,500 and 2,000 baht. The amount fluctuates based on a variety of factors, such as how often you use the vehicle, the current price of gas, and the car's fuel efficiency in kilometers per liter.
The more kilometers you drive per day, the higher your fuel bill will be. In addition, different gasoline prices at different gas stations in the city can also affect the overall cost. Traffic congestion in Bangkok can also affect fuel consumption due to frequent idling and stop-and-go driving. When budgeting for car ownership in Bangkok, taking these variables into account is essential for an accurate estimate of your monthly fuel expenditure.
Many hidden costs can add up quickly, catching many car owners off guard. However, there is also a car subscription service in Thailand called Carzuno that offers a convenient solution that includes all these additional costs in the monthly fee. There's no need to worry about depreciation values, insurance premiums, loan interest, maintenance costs, or taxes because everything has already been taken care of.