Buying a second-hand car in Thailand is one of the most enjoyable ways to explore and discover everything this tropical destination has to offer if you’re planning on staying there for a while. How else would you make your way down to experience Phuket’s pristine sandy beaches, and the ancient historical sites in Sukhothai, or immerse yourself completely in the lush jungles of Khao Yai National Park?
Second-hand cars are available at a variety of places in Thailand, and we’ll brief you on all of them. If you’re on the fence about buying a new or used car for your time in Thailand, we’ll let you know why going for pre-owned cars might be a better option. And finally, we’ll guide you through the entire car purchase procedure for a used car, including detailed instructions on how the ownership is transferred to you, how you can pay the seller, and how to purchase insurance. Let’s get started!
Reasons For Buying A Second-Hand Car In Thailand
If you’re still trying to decide whether to go for a new or used car, here are all the benefits of buying a used car.
A Used Car Is Cheaper Than A Brand New Car
There are many car manufacturing and assembly plants in Thailand operated by well-known Japanese brands like Nissan, Toyota, and Honda which produce new cars locally. While the Japanese brands hold the majority of the car market share, makers of American and European cars like Ford, General Motors, BMW, and Mercedes are also present. This means that the price of a new car that is produced locally is much more affordable than an imported model.
Even with this lower cost, it cannot be denied that a used car is still about 50% cheaper compared to the price of a brand-new car on average. For example, a Toyota Corolla Altis, a popular car model in Thailand, could cost you roughly a million Thai baht when purchased brand new, whereas a used car would be around 500,000 baht.
This is what has allowed low to average-income households to easily afford a car in Thailand. This is also great news if you’re a tourist planning to spend a few weeks driving around the country, or you’re a work permit/long-term visa holder in Thailand for a few months. Since manufacturers don’t make massive changes to their models every year, you could enjoy most of the features of a new car but without its hefty price tag.
Depreciation Is Lesser
The depreciation is essentially the price difference between a new car and a used car depending on the mileage as well as the wear and tear. Apart from this, other factors determine depreciation. The change in status from a new car without an owner to a pre-owned one is often enough to instantly affect the value of the car.
For example, it is estimated that a new car will lose about 10% of its value when it leaves the car dealership. If the new car cost you 900,000 baht, it will be worth 810,000 baht before you even reach your home. Even if you attempt to resell it to the same dealer the next day, he won’t pay more than 810,000 baht to take it back.
Older models will also lose value when a new model is released with improved features and technological advancements. This is estimated to be about 40% by the time a newer car arrives at the store.
What all of this means is that generally, new cars will depreciate faster than used cars. Used cars will already have depreciated significantly before you purchase them, and will continue to do so at a lower rate compared to new cars. This depreciation may be negligible if you’re only driving it for a few months during your stay in Thailand.
By the time your holiday is over and you’re preparing to leave Thailand, you could resell your used car and recoup most of the money you spent on it. You cannot do this with a new car which would’ve lost a significant amount of value since buying it.
Lower Car Insurance Premiums
Buying a used car will also grant you benefits when you purchase insurance. Since a used model is less expensive to replace, repair, or find spare parts in the event of an accident compared to a new car, you will be paying lower premiums to your insurance company. Remember that after buying a car, it is mandatory by Thai law to have it insured before driving it, even if you’re only using it for a few weeks. You can save money on your insurance by buying a car that has already been used.
Tax Savings
When buying a used car or a new one, you will be paying 7% as value-added tax (VAT) on the purchase price. This means that how much tax depends on the value of the car you’re buying. It doesn’t take a mathematician to understand that the VAT you’ll be paying for a new car costing a million baht is much less than the VAT you’ll have to pay for a pre-owned car priced at 500,000 baht. This reduced tax is another reason why used cars are more affordable and a better deal than paying a higher price for a new car.
Where To Buy Used Cars In Thailand
Image taken from www.autodeal.com.ph
An authorized car dealership is the best place if you’re in the market for new cars from manufacturers like Toyota or Honda. When buying a car that is used, however, you’ll have to go with one of the following options.
Car Tents
You can find a used car dealer at one of these tents. While you can find great bargains at a car tent, the sellers here are unlikely to let you test drive their second-hand cars as an authorized dealer would. You will be expected to purchase the car as you see it, so it’s good if you have a friend accompanying you who knows what to look out for when buying pre-owned cars if you don’t have the eye for it.
The warranties will naturally be limited for these cars. The thing you have to watch out for are various underhanded tricks a car tent dealer might pull such as presenting a lower mileage or putting in replacement parts that are not genuine. One thing you can check is the official tax sticker provided by the Department of Land Transport which every car has to carry. This will indicate the roadworthiness of older car models.
You may also be able to get a loan from one of the partner finance companies of the car tent dealer. The purchase price might even be lower when going with a loan compared to paying by cash. One piece of advice is to collect the car immediately after making your payment since some shady dealers have been known to replace parts after your initial inspection.
Car Auctions
A car auction can be a great place to find some amazing bargains if not too many bidders are interested in the same car as you. Since you have to contend with other buyers, it is possible to overpay for cars in high demand if the bidding price keeps going up in a heated auction. Union Auction is a website that has car listings that are up for auction with accompanying pictures and a detailed description for each listing.
Image taken from www.cdn.car4sure.com
Since the auction house is the third-party representative in this transaction, you will have to pay a small administrative fee on top of the final bidding price. Most places will accept cash payments, internet banking transfers, or bank cheques to be made within one working day after the sale. VAT is also applicable, although you can usually check for these payment details on the auction house’s website.
It might also be possible to inspect a car before it goes on auction by paying attention to the auction calendar online. If you do get an opportunity to see for yourself the car, its tax sticker, and any accompanying documents like service history, don’t pass up on this chance to make sure the vehicle is in good condition.
To ensure you don’t end up overpaying, keep a budget in mind and try to stick to it. Always inspect the vehicle if possible, and check what safe options are available for making your payment. You cannot return a car if you’re unhappy, so make sure you read all the terms and conditions on the auction house website. When making your auction profile, make sure you register with the correct customer details, and don’t wait till the last minute to place your bid.
Buying A Car Online
Image taken from www.motors.co.th/en
While there are plenty of websites that feature car listings online, it’s important to visit one that is reputable. You might have to pay higher fees on more established websites, but at least you won’t have to worry too much about ending up with a dud. Motors.Co and Siam Car Deal are some of the more reputable websites that provide online car listing services.
The Motors.co.th website is very simple in its presentation. You can search features to receive a list of results based on your budget, expected mileage, manufacture date, fuel type, car cylinder capacity, model, and more. You can even search based on the manufacturer if you’re only interested in Toyota for example. After selecting a listing you’re interested in, you can view multiple photos of the vehicle and relevant details. If you wish to receive additional information or inspect the car yourself, you even have the option of contacting the current car owner.
Siam Car Deal offers many of the same options but with the additional benefit of allowing you to browse through new car listings from dealerships. Apart from car listings, some of these websites also provide insurance packages from their partner companies. If you browse carefully, you might even discover a free insurance plan for the first year when you buy a car from a website.
Private Listings
While online listing websites are more convenient, you do have to pay a small administrative fee for the website owner even if you’re purchasing your car from a private seller. One way you can avoid this is to look at private listings in car magazines and newspapers. Since you would most likely visit the car owners to inspect the vehicle in person, there’s no reason why you can’t go through these listings on print media to narrow down your search. Furthermore, you might even save some money by taking this route instead of going to a dealer at a car tent.
The Used Car Buying Process
After you’ve browsed through the listings and found a great deal, it’s time to make your purchase. A used car will already have the official white plates with the license number, unlike a new car which first comes with temporary red plates on your delivery date that is later replaced. The things you need to keep in mind are the transferring of the ownership to receive your official blue book, making payments, applying for insurance, and paying taxes.
The Transferring Of Ownership And The Blue Book
The official blue ownership book given out by the Department of Land Transport can be obtained by visiting their nearest office and completing the transfer of ownership process. Since the blue book is what identifies you as the car owner, you must complete this registration procedure before completing the transaction.
When transferring ownership, you will need to take the used car, its current blue book, the supporting documents, and a filled application form that has to be signed by both you and the seller. Your supporting documents will include your passport and visa documents, work permit, and residency information. If the seller doesn’t accompany you to the land transport office, you will also need a copy of their national ID if they’re a Thai citizen, or a copy of their passport if they’re a foreigner.
The inspectors will check the vehicle to make sure it’s street-legal and safe to drive. After this inspection, if all the documents are in order, you will be required to purchase the Compulsory Third-Party Liability Insurance (CPTL) also known as ‘Por Ror Bor’ which provides coverage for medical expenses in case of an accident. Afterward, you will be issued your blue book identifying you as the new owner of the car, which can be collected after paying the transfer fee which costs around 300 to 400 baht.
In some cases, it could take a few days to complete the transfer, especially if you’re residing in a different province from where the car is currently registered. Furthermore, changing the province will also require you to be issued with new official white plates which will cost you a further 200 to 200 baht.
However, if you’re from the same area where the vehicle is registered, and you visit the land transport offices early in the morning on a working day, it may be possible to complete the transfer of ownership and receive your blue book within the same day. For more information, read How to Transfer Car Ownership in Thailand?
How To Pay The Seller
If you have enough money to finance your used car purchase, then the payment could be made through an online transfer, bank cheque, or even cash if the seller agrees to it. If you don’t have enough cash at hand, there are options to find financing through a local Thai bank or even via the dealership if they have partnered with finance companies.
For a foreigner to get a bank loan, you will need to have a bank account with good standing, place a downpayment, and carry a valid work permit to show that you will be in the country for the time it takes to pay back your loan. It may be possible to receive a bank loan without a work permit, but you will need to place a higher deposit if you’re applying with a long-term visa. When purchasing your first car, you will also need a Thai guarantor to be eligible for the loan, or place an even higher deposit.
It’s always safer to go with a reputable bank that has been around for decades when obtaining a loan. You may also be able to get special financing offers by going through a dealer, although this is only recommended when purchasing a new car from an authorized dealership. Small-time dealers at a car tent might not exactly play by the rules, and you certainly don’t want to get into trouble by getting financing from their sources.
Getting Car Insurance
As mentioned earlier, Compulsory Third-Party Liability Insurance (CPTL) is a basic requirement for you to legally drive your car on the streets of Thailand. However, this only covers medical expenses and does not include any collision coverage. This means that any damages to your car will need to be fixed with your own money if you’re involved in an accident. Furthermore, you will have to deal with the traffic police, third parties involved in the crash, towing, and repairs by yourself.
The solution is to get a private insurance plan which offers many types of insurance plans that include collision coverage, third-party property damages, as well as fire/flood, and theft. These plans also provide you with roadside assistance, sending an insurance company representative who will help you process your claim and communicate with other relevant parties. Getting private insurance for your car is recommended.
Getting Your Tax Sticker
Image taken from www.worldlicenseplates.com
When completing your transfer of ownership at the Department of Land Transport office, you will also have to pay taxes to the Thai government. The tax depends on the car’s cylinder capacity, its brand, and the specific model. This is where buying a used car will benefit you since models older than five years will be eligible for a tax deduction.
Keep in mind that these taxes will have to be paid annually to extend or renew your vehicle registration. The tax sticker you receive every year after completing payment will have to be displayed on your windshield. Furthermore, if you have installed CNG or LPG gas tanks on your car, these will have to be inspected by a certified engineer every few years before you can pay taxes and renew your registration.
Don’t Forget Your Driver’s License
Once you have completed your payment to the seller, registered your vehicle at the Department of Land Transport under your name, received the blue book, paid for insurance, and collected your tax sticker, you are now ready to drive your newly purchased used car. Before you start driving, you will also need a valid driver’s license to legally drive a car in Thailand.
A new driver’s license can also be obtained at the land transport office by submitting an application with all the supporting documents and passing the required tests. Foreigners are also eligible to carry a Thai driving license.
Ready To Drive Around Thailand?
If you’re planning an adventurous trip driving your car toward a destination like Phuket in southern Thailand, there is much to see and experience along the way. If you need a local guide in Phuket that can show you the tastiest restaurants that serve authentic Thai cuisine, the best places to engage in beach activities, or the most highly recommended Muay Thai gyms in town, then Ushup can help you there. We know all the best routes and must-see tourist spots in this part of Thailand. To find out how we can help guide you, visit Ushup today!
FAQs
You could purchase a car with a tourist visa. However, to complete your transfer of ownership and register your vehicle, you will require a valid work permit or a certified letter of residence issued by your embassy in Thailand. This residence letter is only issued for the long-term visa holder. Therefore you cannot legally register a vehicle in your name if you only hold a tourist visa in Thailand.
If you’re only visiting Thailand for a short period, it would make sense to purchase a used car instead of getting a brand new one since it will give you several benefits. A pre-owned car is much more affordable and costs less to have insured. You will be paying fewer taxes on the transaction and on getting it registered. Finally, a used vehicle will depreciate slower, allowing you to recoup most of your cost of purchasing it when it’s time to sell it before leaving Thailand.
You can purchase used vehicles at a car test dealer, auction house, online websites, and private listings on both print and digital media. No matter where you purchase it, you will need to register it in your name, purchase insurance, pay the road taxes, and have a valid driver’s license before you can start driving your car.
