Tag Archives: Buying Cars

That Car Is More Expensive Than You Think…

There was an article on the BBC today about 24 Nepali government vehicles that were returned following a Supreme Court order last month. The cars were used by the former King Gyanendra and former prime ministers and ministers, and now the cars are gathering dust in a government garage. The stash included SUVs, Land Cruisers, and the Mercedes Benz used by the King. The article was just the kick I needed to write a post on a topic I’ve been meaning to touch on…

Day to day life in Nepal is generally much cheaper than living in the United States. Prices are on the rise, but if one was earning an American wage and living in Nepal, you would be living a fairly comfortable life.

However there is one luxury good that still might be difficult to attain even with such a comparably comfortable income—a car.

Cars are expensive everywhere. I don’t really know anyone who can just walk into a car dealership in the US, and pay for a new or newer used car in cash, and walk away without any type of loan or payment plan. I bought my first car after I graduated from college so I could commute back and forth to work and it took five years for me to pay it off in full (a car I still happily drive).

Yet cars in Nepal are different. Not only are you paying the price of the car, you are paying a 200% tax on top of the sticker price (actually on further research, it looks like the tax is more like 238%).

So that means if you bought a car for $10k, you would be paying $33,800 total!

From what I understand, part of the reason for such a huge tax rate is to discourage people from owning cars. The Kathmandu Valley is essentially a bowl, a round depression encircled by mountains. There is only so much the city can expand (thus road expansion projects are not overly feasible), and likewise, air pollution sits heavy in the valley and has trouble expanding out/upward. The more people, the more cars and congestion, the more air pollution.

Visual of the KTM valley-- dark gray "bowl" shape is the encircling mountain range

Meanwhile roads in Nepal still aren’t great. Your car could take a beating on a daily basis, and probably would not last as long as a car on the smoother roads of the US (although I must say, I traveled on a few roads where the beat up old taxi I was in held up shockingly well… I was certain the tires on my car back home would have flattened if not burst on  some of the rocky beat up paths we took on a side trip to a monastery one day). Sadly the exorbitant car taxes aren’t being put to good use on road construction and maintenance. Many Nepali roadways are pocked with potholes, and outside the valley some of the mountain and high hill roads can be downright treacherous in the monsoon/landslide season.

When P and I were in Kathmandu in September/October we met up with a high school friend of P’s who is now a doctor in the city. He had a car—not a super fancy one, there wasn’t even a radio, and our KIA back in the US certainly looked fancier on the inside—and he was telling us about buying cars in Nepal. P and I were thinking that if we ever moved to Nepal for a period of time it would be far easier to travel by car (versus public transport/taxi), but after hearing his friend’s stories, and calculating out all the taxes, I don’t think it would be possible.

Even if you bought a Tata Nano in India—“the world’s cheapest car”—for about $2,100 (US) at its cheapest, and drove it across the border, it would still cost more than $7K total… and I’m not overly sure I’d want to be in a Nano on a rough road. It’s a light car, with no air bags.

Perhaps I should learn to drive a scooter instead? Or steal one of those fancy government vehicles just sitting in that KTM garage. Can you imagine what that Mercedes Benz must have cost?

And speaking of crazy roads in Nepal, P came upon this link on facebook a while ago (I tweeted the link some time ago). It’s an hour long BBC program about driving on “the World’s Most Dangerous Road’s.” The two British hosts are a bit on the weird side sometimes, but it gives you a flavor of driving across the country (south to north):

Also Nepali Jiwan has several posts about her experience with cars in Nepal: Their Car, Seeing a Nano