What are the essential expenses when buying a car?
2 Answers
Essential expenses when purchasing a car include the ex-factory price of the vehicle, purchase tax, vehicle and vessel tax, and auto insurance. Below is relevant information about mandatory fees when buying a car: 1. Ex-factory price: First and foremost, the vehicle price constitutes the largest portion of the expenditure. 2. Purchase tax: To legally drive and register the car, purchase tax is indispensable. 3. Vehicle and vessel tax: This tax is directly linked to the vehicle's engine displacement. 4. Auto insurance: Vehicle insurance consists of compulsory traffic insurance and commercial insurance. Mandatory coverages include compulsory traffic insurance, third-party liability insurance, vehicle damage insurance, theft insurance, passenger liability insurance, scratch insurance, and spontaneous combustion insurance.
I recently bought my first car, and the mandatory expenses really opened my eyes. It mainly breaks down into several parts: the price of the car itself is the foundation—you have to pay this to own the vehicle. Then there’s the purchase tax, which can’t be avoided—it’s 10% of the transaction price, as mandated by the government. Additionally, there’s compulsory insurance, known as 'traffic compulsory insurance' (交强险), without which the DMV won’t issue license plates. Finally, registration fees are unavoidable, covering costs like license plate production and the vehicle registration certificate, usually totaling a few hundred yuan. Some 4S dealerships may add service or documentation fees—though not mandatory, many first-time buyers overlook these and end up overpaying. Asking about these fees before placing an order can save headaches. Factoring all this in, the total cost is at least 20% higher than the car’s sticker price, so new buyers should budget carefully to avoid pitfalls.
