Cars are cheap in the US. As soon as you go car shopping outside the US, you may encounter prices that are just staggering. Don't be fooled, and don't be put off. Those cars that seem to be 2-3 times over your budget, would be affordable if sold in the US. While the pre-tax price does vary from place to place, it is additions like sales tax, VAT, luxury good tax, import duties, and other government levies, reflected in the published MSRP (Manufacturers' Suggested Retail Price), which can vary wildly from country to country. CelloMom has highlighted the Netherlands as an example; here she looks farther afield and reports prices of the Toyota Prius and the Honda Civic at selected locations around the globe.
The tables below quote the "from" MSRP for the least expensive trim option, including all government taxes but excluding items such as dealer prep and registration fees, which presumably also vary wildly over the planet. The one exception is the US price, which is quoted without the sales tax; the latter varies from nearly 10% in California, to nil in states such as New Hampshire and Montana.
The Honda Civic was chosen because it is one of a handful of cars that is sold almost everywhere and you can get the same version of it in many places, specifically the 4-door sedan with a 1.8L SOCH i-VTEC engine and outfitted with a 5-speed automatic transmission.
Purchase Price of Honda Civic
|MRSP From||in US$|
|US||US$ 15,805||$ 15,805|
|Australia||A$ 28,402||$ 30,000|
|Germany||€ 25.150||$ 36,500|
|France||€ 28.050||$ 40,700|
|UK||£ 18,745||$ 30,700|
|Argentina||US$ 33,250||$ 33,250|
|Brazil||R$ 71,430||$ 44,500|
|India||Rs. 13,96,200||$ 30,600|
|Indonesia||Rp. 352,000,000||$ 41,400|
As the table shows, the MSRP of a Civic is nowhere lower than in the US. In most of the world, the purchase price of a Civic is about twice that in the US, and in Brazil nearly 3 times as much. (The Civic is no longer sold in Japan as of late 2010).
The pre-tax price is actually comparable everywhere, the differences apparent from the table above arise from the different taxes applied by the various nations. For instance, see the interesting map of the variation of car-purchase taxes in Europe.
The second car chosen for this very non-scientific study is the Toyota Prius hybrid, because it also is sold around the world, with the same 1.8L engine, and the same automatic transmission.
Purchase Price of Prius
|MRSP From||in US$|
|US||US$ 23,520||$ 23,520|
|Japan||¥ 205,0000||$ 26,600|
|Australia||AUD 34,990||$ 36,750|
|Netherlands||€ 25.990||$ 37,700|
|Germany||€ 25.750||$ 37,300|
|France||€ 26.500||$ 38,400|
|Denmark||DKr 389.499||$ 75,600|
|UK||£ 20,845||$ 34,200|
|Argentina||US$ 41,900||$ 41,900|
|India||Rs. 27,08,493||$ 58,700|
|Indonesia||Rp. 626,700,000||$ 73,000|
For the Prius as for the Civic, it is in the US where the purchase price is lowest (even including the state sales tax), even beating the price in Japan, its country of origin. In Europe the Prius is only 1.6 times more expensive than in the US, reflecting its special hybrid status which qualifies it for a very significant tax break. In France, you pay less for a Prius than for a Civic. On the other hand, gas guzzlers are charged rather punitive taxes. Come to think of it, CelloMom has yet to see a Hummer anywhere outside the US.
In Denmark, even the Prius gets no breaks. A VAT of 25% is levied on all new cars. Then, deductions are applied for a few items such as ABS brakes (but not, apparently, the hybrid engine). After that, the remainder gets hit with a registration tax, at 105% for the first 76,400 kroner (US$ 14,800), and at 180% on anything over that. That's on top of the VAT. Think of the Danish next time some US administration proposes a tax hike. No wonder they use almost more bikes than the Dutch.
Interestingly, in India and in Indonesia, where the Prius is respectively 2.5 and 3.1 times more expensive than in the US, the fuel efficiency is not mentioned at all in the promotional literature. One supposes that whoever can afford to buy such a luxury item, doesn't have to worry about the price of gas, about $6/gal in India, and $2.25/gal in Indonesia.
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