‘Tell me something about car prices in Bangladesh. What does it depend on? ‘ I work for an electronics company, we have a vehicle tracking device on the market, so maybe he knows I know the answer. On the same day, I searched the net and saw what information was available about this. It seems that the information I get is shared with others. Those who do not know, or want to know, will benefit from it. For that purpose, today’s statement is very simple – ‘car price in Bangladesh: buy your own car, see-hear-understand before buy.’
How is car price in Bangladesh determined?
The exact price of a car in Bangladesh depends on the original product price, import tax, and other VAT. As tax-VAT changes from time to time, so does car price in Bangladesh. According to the 2017-2018 budget, VAT is still 15%. In addition, an import tax of up to 25% for 1.5L engine, 100% for the 2L engine, and up to 200% depending on the size and power of the engine will be levied. Other common taxes on car prices in Bangladesh are SD (supplementary duty), RD (regulatory duty), and AIT (advance income tax).
SD = (100% CIFD), RD = 4% (SD + CIFD), AIT = 5% CIFD.
With these, the importer will cover the import cost, insurance, and other expenses. Suppose you buy an Audi R8 with an engine of 5L. If the original product price of the car is 162K US dollars, then you have to calculate the total cost is about 1 million dollars. Because you have to pay 800% import tax for the 5L engine. Now calculate the value of the dollar, how much is in Bangladeshi currency.
The price of the car also depends on the import process
The car price in Bangladesh also depends on the import process. In the case of car imports in Bangladesh, usually, three processes are followed. These are CBU, CKD, and chassis fitted with engines.
1. CBU means Complete build up cars. I mean, a perfectly made car. Car importers pay a 212% tariff in this case.
2. CKD stands for the Complete knockdown process. In this process, only car parts are imported. They are fitted in our country. In this case, the importer pays a 105% tariff.
3. In another method (chassis fitted with engine) the importer pays a 59% tariff.
Needless to say, if you buy a complete build up the car, you have to spend more money than anything else.
Reconditioned cars can be bought at low prices
Reconditioned or pre-used cars are very popular in Bangladesh. Many middle-class people are able to buy these cars due to their relatively low prices. Reconditioned means second-hand car, but not exactly second hand. In other words, those who sell cars to dealers in the country, have completed the necessary repairs by a reliable company. Then comes the turn to verify them. Any Toyota band car is verified by the Toyota company. So are others. Only if the related company gives a certificate to the vehicles that they are 100 percent in good condition, then they are approved for export.
The price of these cars depends on how long they have been used before. Generally, used cars are allowed to be imported for 3-5 years. The reason for the low price of cars is that importers get depreciation benefits in this case. In the language of trade which is called ‘depreciation facility’.
What is the depreciation benefit in the case of a car?
15% for 6 months-1-year-old cars, 25% for 1-2-year-old cars, 35% for 2-3-year-old cars, 40% for 3-4-year-old cars, and 45% for 4-5 years old cars. The importer gets depreciation benefits. No such advantage is found in the case of the other methods described above. Suppose an importer had to pay 100 rupees to import a car. Now if he gets a 45% depreciation benefit, it will come down to 55 takas. All VAT will be added to this. If you buy a reconditioned car, you need to understand how many years of used car you are buying.
You know what the price of a car in Bangladesh depends on. Buy your own car now.
