Honda Hatchback for sale

Taxes and fees when buying a new car

You are looking for Honda Hatchback for sale in the Philippines on Philkotse.com - one of the most popular automotive websites in the Philippines.

For your convenience, we have listed here those fees and taxes you need to pay associated with a brand new car and some short explanations for why each of them is necessary for buying a new car.

Make sure to follow Philkotse.com to equip yourself with the necessary information before spending your hard-earned money on such a big financial asset as a car.

1. Compulsory Third Party Liability Insurance or CTPL

Typically costing around Php 1,680 and lasting up to 3 years, this insurance is a basic insurance plan that you will need to pay for when you register your Honda car, regardless of its condition.

It covers any damage that will be caused by your vehicle in the event of an accident. CTPL though is very basic and sometimes its coverage is not sufficient, as such you will also need to get comprehensive car insurance which most car dealerships today, including Honda Philippines dealerships, of course, will require if you purchase a brand new vehicle from them.

2. Comprehensive Car Insurance

While costing a lot in comparison with the CTPL, is a more comprehensive policy, hence the name.

Unlike the CTPL which covers only damage to others as a result of an accident caused by your car, the comprehensive insurance will cover damage to your own vehicle as well. In many of these comprehensive insurance policies, also covered are acts of nature which will have incurred damages to your vehicle like floods, earthquakes, vandalism, etc.

In many dealerships of such popular auto brands as Honda Philippines, it is offered and will save you a lot of headaches and heartbreaks, especially if you really worked hard to get your brand new car.

3. Taxes and eVAT

As you may well know, the Tax Reform for Acceleration and Inclusion (or TRAIN for short) has greatly affected the buying price of a car. Honda Philippines car price list is certainly not an exception.

The increase in pricing depends on the net manufacturer's or importer's selling price (NMISP). With the train law, the excise tax for these vehicles worth Php 600,000 will have 4% tax, Php 600,000 to Php 1 million will have 10%, one million up to four million now has 20% and those cars with over four million will have a 50% tax. 

Like any type of goods, cars are also no exception to Value Added Tax or VAT. Currently, the VAT of a brand new car is around 12%. So a car which has a hypothetical NMISP of Php 400,000 will be worth Php 560,000 after the estimated 20% profit of the dealership, the 12% VAT, and the excise tax rate.

Note that the excise tax rate will be higher for larger or more performance-oriented vehicles because they essentially have a higher NMISP.

4. Other Fees

Some dealerships will have your convenience in mind. Therefore, they will offer fees for several optional plans like fabric protection, paint protection, and others.

Some fees, however, can be compulsory like the vehicle identification number etching which is needed for both registrations and as an anti-theft measure. Also, there's the dealer preparation fees, shipping fees, and processing fees.

If you have other questions with regards to the car buying process, you can visit Philkotse.com anytime to find more helpful tips and advice.

Lastly, please note that besides models from Honda, you can also take a look at our large listings for new and used cars for sale from all major manufacturers with car models available here in the Philippines.

We wish you find your next car soon!