[RahulNagaraj]

As per a recent study, Australia ranks as the cheapest country to own a car, requiring only 49.48% of the annual salary to own and run a car. The study also states that the USA ranks second, requiring 54.87% of the annual income while Denmark completes the top 3 with 60.34%.

Further down the list is Canada and Sweden requiring 64.40% and 75.84% of the annual salary, respectively. Countries like Germany, Netherlands, France, UK and Finland are positioned much lower in the top 10 list.



Moving to the opposite end of the scale, Turkey ranks on top as the most expensive country to own and run a car, requiring a staggering 652.29% of your annual salary. Argentina came second on this list with 515.77%, Colombia in third with 508.93%, while Uruguay and Brazil completed the top 5 with 443.68% and 441.89%, respectively.

The top 10 most expensive countries in which to own a car also included Ukraine, Guatemala, Russia, Mexico and Costa Rica.

In terms of the methodology used to ascertain the figures, the study is said to have used the same car models (Toyota Corolla & Volkswagen Golf) across the board for a more even comparison. The study is also said to have factored in the average cost of vehicle insurance, fuel prices and repairs to determine the ownership costs.

The cost was then compared to the country's average yearly salary to determine the exact percentage figure. Having said that, the study took into account only 40 countries whose average cost data was readily available.

Source: Scrapcarcomparison

Link to Team-BHP news

[SmartCat]

I'm not sure about this "average cost of car" divided by "average yearly salary" metric. I would rather compare the price of a global car model like Toyota Corolla (or equivalent) and compare it with GDP per capita (it is not the same as per capita income, but its a well known metric for prosperity of country's citizens).

Examples (high income/mid income/low income countries):

Price of Toyota Corolla in United States: $25,000
US GDP per capita: $60,000
Affordability Ratio: 0.41 (lower the better)

Price of Toyota Corolla in China: $25,000
China GDP per capita: $10,000
Affordability Ratio: 2.5 (lower the better)

Price of Toyota Corolla equivalent in India: $35,000
India GDP per capita: $3,000
Affordability Ratio: 11.66 (lower the better)

[prajwalmr62]

Originally Posted by SmartCat

I would rather compare the price of a global car model like Toyota Corolla (or equivalent) and compare it with GDP per capita.

But we have more affordable options like Alto etc, which other countries might lack. Average car cost and average salary covers both personal income and car market prices.

But, shouldn't we consider expendable income instead of overall salary?


Edit - Study also factors in the running cost of a car.

... added them to the average cost of car insurance, repairs and current fuel prices to evaluate

[charanreddy]

This is a flawed way of looking at the overall picture.

Same model cannot be compared across the board.

A more fool proof way of looking at this is

(Median price of all the cars available ( lowest variant ) + average maintainance and fuel costs ) / median per capita income.

Even better way would be to take a weighted average of the car price / per capita income.

Corolla is a D segment sedan in India and a very basic car in the US.

[SmartCat]

Originally Posted by prajwalmr62

But we have more affordable options like Alto etc, which other countries might lack.

Originally Posted by charanreddy

Same model cannot be compared across the board. Corolla is a D segment sedan in India and a very basic car in the US.

My "Corolla Index" idea is not original. It is lifted from the Big Mac index, which compares the prices of McDonald's "Big Mac" burger across different countries.
https://en.wikipedia.org/wiki/Big_Mac_Index

(Median price of all the cars available ( lowest variant ) + average maintainance and fuel costs ) / median per capita income.

Agreed. But neither the numerator nor the denominator data is available.

[2000rpm]

Originally Posted by SmartCat

I'm not sure about this "average cost of car" divided by "average yearly salary" metric. I would rather compare the price of a global car model like Toyota Corolla (or equivalent) and compare it with GDP per capita (it is not the same as per capita income, but its a well known metric for prosperity of country's citizens).

What if we replace corolla with the cheapest car available in that country.

For example - Alto 800 for India.

[eltoro]

If such a survey/study was to be carried out for the different states of India, I am sure Karnataka, Maharashtra & Bengal would be the top 3.
Haryana, Punjab & Delhi would be the bottom 3.

[AZT]

Also, 'average' income itself is a misleading metric. Median income should be the metric used.

[AJ56]

Originally Posted by charanreddy

This is a flawed way of looking at the overall picture.

Same model cannot be compared across the board.

A more fool proof way of looking at this is

(Median price of all the cars available ( lowest variant ) + average maintainance and fuel costs ) / median per capita income.

Even better way would be to take a weighted average of the car price / per capita income.

Corolla is a D segment sedan in India and a very basic car in the US.

Would have to disagree, if you want meaningful analysis the class of data used cannot be varied, ie. you must use the exact same car model (whatever that may be) when attempting to compare affordability across different countries. Basic tenet of any testing/research, except the variable being measured, all other variables must be kept constant to obtain useable data.

A Corolla, just like a Big Mac, is a Corolla irrespective of where you live, just because one pays much more in India, does not change the nature of the product. It is a compact family sedan wherever you buy it. If one lived in a country where taxes were so high that a Corolla cost as much as a Land Cruiser, it would not mean one has bought a Land Cruiser when they bought a Corolla. Cheers.

[sunsivj]

Today I was discussing a very similar topic with a couple of Nepalis and found that a Maruti Suzuki Swift costs about 16-17 lakhs and google did show a little more. India's index of people's affordability to buy a car is not bad at all.

And fuel cost could bring the next analysis as how the cost of operating a vehicle varies from country to country.

[charanreddy]

Originally Posted by SmartCat

Agreed. But neither the numerator nor the denominator data is available.

Disagree - We know the complete list of car make and models sold in India (First hand, not used / pre-owned). If you add pre-owned into the mix then a lot more normalizing needs to be done on miles / vintage etc etc. New cars information can be obtained with a bit of effort from team BHP monthly car sales + car wale website. Approximation is even easier.

Also the ticket size is completely different. It is easier for people to buy a Mac / burger rather than a car. Extending this argument, if the question was how expensive is it to own a house, a house in California costs a million dollars and up. In India, you get a decent house in Rs 60 - 70 lakh. In California, the normal salaries are upwards of $150K, The equivalent in India is may be Rs 15 Lakh per annum, which is <15% of the value factoring exchange value.
Also country specific factors like mortgage duration, interest rates, rents etc play a big factor here.

Originally Posted by AJ56

Basic tenet of any testing/research, except the variable being measured, all other variables must be kept constant to obtain useable data.

A Corolla, just like a Big Mac, is a Corolla irrespective of where you live, just because one pays much more in India, does not change the nature of the product.

Excuse me, this is a very elitist view that only a Corolla is a 'car'. This argument by default favors those countries with costly currency.

The point of variables is valid if you were running a A/B test, but that's not the point here. The question is how expensive are 'cars' to own and run. Not how expensive is a 'Toyota Corolla' to own and run. If you were Toyota you would be interested in the latter question if you want to prioritize which markets to invest / launch in. If you were an average citizen trying to decide which country to emigrate to, the cost of owning a 'car' is what you would look to. In other words, I would not look to buy a Tesla if I am emigrating to say for example, Sri Lanka.

Disclaimer : Analyzing data is a passion and my core job as well. So my views may come across more opinionated / strong than intended.

[GeeTee TSI]

Notwithstanding our not so great per capita income, cars are also taxed high categorised not as essential but sinful; so effectively a double whammy. That's why the Corolla is a D segment car and the Golf is not (and probably never will be) sold in India.

On a different note, it is amazing how one's garage transforms when one gets a posting abroad!

[SNA411]

Originally Posted by eltoro

Haryana, Punjab & Delhi would be the bottom 3.

No.

Punjab has a flat RTO tax rate.
Cars under 20L ex-showroom = 10% road tax
Cars over 20L ex-showroom = 20% road tax

Haryana and Delhi have the peak RTO rates capped at 10% (for petrol cars). Diesel rates, I dont know of.

So a 40 Lakh Audi would mean 44L on-road in Delhi and Gurugram(and Ambala), yet 48L in Amritsar.

Chandigarh, Daman and Puducherry are very cheap. Almost every luxury car in Delhi NCR is registered in Chandigarh, Almost all Chennai supercars have PY registration, and and a lot of Mumbai supercars (and normal cars) are registered in Daman and Diu.

[DrCar]

Surprised that Singapore isn't topping the list of most expensive countries to own a car.

Singapore levies various charges like Additional Registration Fees, Excise Duty + GST, Certificate of Entitlement, Vehicular Emission Scheme Surcharge and Dealer’s Margin

The final on road price of car like Corolla or Civic will be approximately 5 times its ex-showroom price in Singapore.

Sorry to say but Toyota's move to request Indian Government to reduce taxes wasn't serious enough and they most likely were trying their luck.

[devilking]

Agree with DrCar above.

If the methodology to determine the most expensive countries to own a car considers income levels, then probably Singapore will not make it. But in absolute terms, it is way too expensive to own a car in Singapore.

The certificate of entitlement (CoE) is auctioned every year and is only valid for 10 years. At times, the CoE prices have hit 100000 SGD. On top of that, parking is charged in most places including HDB blocks. 85% of Singaporeans live in HDB (Housing Development Board) flats which means they have to buy season parking to park cars outside their own homes.

Further, they have an ERP (Electronic Road Pricing) which charges the vehicle owners if they enter downtown business areas during certain hours.

It is cheaper to buy a twin prop engine plane in Canada than to buy a car in Singapore. Many Singaporeans joke when they see a car that 'there goes a 2 room flat on wheels'.