Tue. Feb 20th, 2024

VietNamNet Bridge – The sharp decrease in the car ownership registration tax
is believed to help stimulate the demand for used cars.


Vietnam, ownership registration tax, MOIT, strategy

Under a new government decree, from April 1, the ownership registration tax on
the cars with less than 10 seats, registered at the competent agencies for the
second and subsequent times, would be 2 percent instead of the current 12
percent.

The single tax rate will be applied in all localities throughout the country.

Just one day after the day the new decree was released, people flocked to used
car centers to seek to look for suitable cars.

Hoai Nam, an officer of a social sciences institute, who was seen at Hung Cuong
Auto showroom on Nguyen Van Cu Road in Hanoi, said has been expecting the
decision on car ownership registration tax for a long time.

“After reading the news on a newspaper, I came to a lot of used car centers to
learn about the market prices. I have some VND400 million which I have saved
over the last 10 years. With this sum of money, buying a used car proves to be
the best solution,” Nam said.

He went on to say that he really wants a car now to serve his works, and that he
would buy a car as soon as he finds a suitable one.

Trung Thang, the owner of Hung Cuong Auto, has noted that the visitors to the
center on March 27, or the day after the new decree was released, increased
sharply.

Thang said that the buyers now are the ones who really have the demand for cars,
but they delayed the car purchase plan because of the high ownership
registration tax. As soon as the tax is cut, they have no more reason to delay
the plan any further.

However, Thang said, the supply is not profuse at this moment, because car
dealers, mostly small and medium ones, had to bargain cars away before to get
money for bank debt payment.

Also according to Thang, a medium scaled center like his has some 30 cars on
display. However, at this moment, there are only 10 cars available, priced at
between VND400 million and VND2 billion. Therefore, if the demand is really high
as predicted, the market would be very bustling in just some days, while car
dealers would go hunting for used cars.

Ha Minh Tuan, General Director of AnyCar, a used car distribution chain, also
thinks that the used car market would warm up on the good news about car
ownership registration tax decrease.

Tuan said with the 10 percent tax decrease, buyers would be able to save a big
sum of money. The demand for used cars is very big which comes from those, who
buy cars for the first time, who have limited financial capability, or those,
who want to possess luxurious cars at “reasonable costs.”

Observers say the used car supply in Hanoi is now modest. The owner of a used
car center in Cau Giay district said he had to sell tens of used cars cheaply
before the tax decrease decision was released, because he had to earn money to
pay bank debts.

“Only the big car dealers who have big capital, can hold cars in their
storehouses until now and make fat profits when the tax decreases,” he said.

Meanwhile, the majority of other dealers sold cars away many months ago, because
they did not know if the car market would recover.

TBKTVN

By vivian