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Update Obviously I'm confused people as much or more with this post as I am illuminating some as an economist addicted reader, I like unraveling the myths and stereotypes that Europeans pay 30k for a Ford Focus or base 9 to pay for a gallon of gas we do, if we go with our dollars They does the information below is designed as a set of tools to better understand the issues, but do explain that I ran perfectly time to respond to comments, so I hope this helps or lift an economist.
European prices of new cars can be as confusing to us Yanks as a menu command in Latvia We are always hearing about econoboxes of 29k and lower list prices as are usually converted into US dollars and results MSRP can be very misleading are supposed to be stronger than ours and the tax on the value added 19 VAT is not recognized in the result is often an assumption that European automakers get ginormous price for their small hatchbacks Lets get the confusion curtain and seek some truth as the Audi A3 above if you consider the parity of purchasing power, remove the tax included in the factor 19 and 29 discount offered, the equivalent price is 12353 Let me explain.
Let's start with MSRP reductions are common, especially following the cash for clunker programs in Europe, with only high-demand models exempt obviously slower sellers get discounts over the largest, 42 , was a Citroen Xsara But if you follow this link here; it will take you to a slow Auto Slide Show, Motor und Sport that shows a wide range of cars like the Audi above is in German, but you will be able to understand both price bottom of each screen and the percent reduction.
Tax VAT is included by law in all advertised prices This means that for our needs, and to get an idea of prices that manufacturers get, reduce prices by 15 966.
Currency conversion The dollar swayed by huge amounts over the past decade compared to the euro, but unless you buy dollars, its largely irrelevant to this exercise Europeans are paid in euros, and buy personally in euros, and the general rule is to use purchasing power parity ratio of 1 euro for 1 dollar economist so if you want to know what a car really cost European buyers, don t convert dollars and have long European manufacturers exporting to the United States, currency fluctuations can not drive their prices; the market does.
They either hedge, make less profit until the dollar goes, or have US plants that send some of their cars back to Europe, like BMW and Mercedes do to offset imports Any way you look at prices European, convert MSRP dollars you get confused Yet it is done all the time.
48 Comments on the truth about the European prices of cars; Discounts up to 42.
The discounts you can get on the cars in Europe are crazy about each Ford are very good, but those on the French cars are incredible, you can buy a Peugeot 308 January 6 HDi for 14451 4741 economy, which is the price of a top Ford Fiesta.
Oh, if you want to get the net price after 19 has been added, you must deduct 15 966 ago in Germany discussion about the specified discount, they are generally regarded as exaggerated.
12350 EUR is actually US 17439 44 just type Google 12350 EUR in USD and will do the conversion for you European prices include VAT, which is similar to our sales tax However, the rate is much higher, about 15 for a US equivalent price, then take the price and multiply it by your local sales tax rate that varies across the US My rate is 7, so a 20k car would cost 21400 You can direct comparison to European prices after VAT, quoted in the advertisement D.
The article also indicates that reductions of more than 20 are in Germany for the most part be achieved by purchasing a Tageszulassung a car that was registered to the dealer for one day Usually, it's the brand new cars, not feed at all, which have been registered, in order to be sold with a higher discount the buyer gets a cheaper car, which is still quite new but the guarantee began the first day of the car was registered and not one he bought also, the resale value is down, since the buyer is now the second owner of this vehicle.
The dealer gets the car of his lot Usually this is done with the cars that were on the ground for several months and are preconfigured so since European car buyers generally want the option their own vehicle, they don t get these discounts seriously, if you do not agree Tageszulassungen and Re-Imports cars that were exported to another country and then re-imported, it will probably be difficult to find someone in Germany more than 10 discount on an A3.
French MSRP's are greatly exaggerated have always been, at least in Germany French cars have generally MSRP s higher than comparable German cars but you still get a paid manufacturer even before discount start haggling with the broker that is what the disqualifies the German company car market, as rental rates and taxes are calculated from MSRP.
Thank you to mention this, Paul I had to understand that myself not there a few years Economist subscription by the Travel School and more expensive experience, but more interesting than economist makes me crazy when people start fighting yakkin 30,000 Focuses.
A focus More than thirty Grand Alfa 159 to 16k Yes, that's what you pay for a well equipped, beautiful new four-door, ESP, stereo, equipped Alfa electric -all in Germany if you go in one of several consolidators EDITSEARCH scopeID C lang fr export ALSO_EXPORT damageUnrepaired ALSO_DAMAGE_UNREPAIRED biggest prize minFirstRegistrationDate maxMileage 5000 fuel postcode ambitCountry.
But then you have the 19 VAT If you are a business owner or if you are self employed you may obtain a refund of at least half of that quite quickly so it is cheaper for virtually everyone who buys a car which can be used for business Nobody buys a car steering it s small portion of their net salary.
The cars are so cheap in Europe You can get a Dacia like the one I reviewed for 8k Or a good Fiat Panda or a Toyota Aygo, or anything else.
Ford Focus here are the prices for a well-equipped with auto trans more expensive than manual Alfa executive who goes somewhere to why Ford is healthy and Fiat is sick, minPrice minFirstRegistrationDate 2009-01-01 maxFirstRegistrationDate largest price minMileage maxMileage 5000 ambitCountry postcode export ALSO_EXPORT damageUnrepaired ALSO_DAMAGE_UNREPAIRED 3 ScopeID C vehicleCategory car segment vehicle transmission AUTOMATIC_GEAR siteId GERMANY customerIdsAsString lang fr.
I think Paul's point is that the manufacturer collects the price is almost the same if the car is sold in the US or Europe, where price inflation measures is due to price the government collects Yes , pays a much However, our advantage is that the US government began to implement a VAT has not yet.
Article interesting things to remember 1 European tax on car owners, perform vary a little 2 Europe has not so much the straight road as the US You really want a smaller car better able to handle the twisties and navigate through a 18th century village street 3 parking is a pain in the ashes 4 Europe's dense population and public transportation is really the need of a car is not ideal for most people the 5 french are excellent drivers Bonus factoid.
Also Euro Focus is really a good car is a midsize sedan and it is not the same as development of the United States.
It is not a Europe thing In Canada, citizens of different provinces can pay different provincial sales taxes Also, we all pay a federal sales tax Don t some US states have sales tax on cars and tax gas guzzler So now Paul is supposed to account for the tax in each market before you can compare prices My interpretation of the subject is that it compares the price of the product, not the associated taxes.
They tax on engine displacement of good tax which the sticker price in these areas to high cost or as calculated at point of sale.
I disagree with ignoring the sales tax to VAT Here you are of course given a price at which you need to mentally add about 7 Florida Just because you buy in to all-inclusive price, you still pay about 10 more tax you made in the US no refund you the money lost to tax whatsoever 7 Florida, 19 in Germany, 25 in Sweden and Denmark 180.
Canada is a niggly taxes delicate, but the best is that trucks cars are not the same Sometimes it is a package option that is standard Some models are simply not usually offered as the base version is based on the basis of this s in the ads.
For an example of the Ford Raptor, an edition funky option limited to F150 buyers Base price in the States is 38000, but in Canada it is 50,000 But who is the deluxe package and additional addons that jackup as pricing and are not negotiable A Base model isn t just in Canada.
Yes, Canada's frustrating is mostly little difference between the price of the basic model of the US Canada Canadians get crucified when buying cars with a higher type of finish you can switch to a 10K difference because you want to sit your ass in a leather seat here taxes are about 13 above the sticker price here too.
Although this article is on European cars, I always thought that car prices in the United States were incredibly cheap either manufacturers are gouging the world, and are happy to run on thin margins razor sneak into the second largest auto market in the world hello China Take for example, the Subaru WRX in Australia we pay the AU 43950, while USAsians pay 24995 and the USA model doesn t come with fewer features, or less energy the Australian dollar is buying US91c right now, so we're paying 40,000 for a car that costs you the 25k Outrageous guys better, Japan grows on the left as if Australia USA Subaru needs models special to the market of the United States Australian and American models come from the same plant, so there are no excuses for the huge price difference we have a 5 import price so make 38k 25k 62 against more money for the same car people in the US donation t know how lucky they are.
Nothing like as the price of European prices are set by national sales companies in each country and there are large variations due to local tax differences eg Denmark has no car industry, so they have high taxes OEM reseller price is lower to maintain affordable cars Germany is the contrary, they have a vital automotive industry, lower taxes and therefore wholesale prices over the net price is closer, but there gray mini market operator OEM efforts to normalize accessibility between high tax countries below the EU is trying to eliminate ifferentials country, but they're not there.
I'm sorry to say this, I Heck even logged on to post a comment but this article is just a point of sale.
What logic is that only pay more Europeans came to 1 1euro wtf.
Take this road to the logic of a carcompany, vw, for example, is money on a carmodel to 11k in allows us to say that they got 10 corporation in price making the total cost of production of a single 10k car.
They sell the same car in Europe and why do not they sell for 10k 7-8k euros, but euro 11k and hmmm would you say if the benefit of carcompany done in absolute dollars or euros is far, regardless of whether Americans and Europeans work the same amount of time for the same car vw could and should sell the car for less in Europe.
MORE EUROPEAN pay 30 plus some more Europeans then paying neighboring countries look und.
And moreover, that Citroen Xsara u used as an example, well I bet many readers do not know, but it's an old model terrified old, mid to late 90s, now sold as a used car that repayment be 42 or something, its not surprise me so hideous take charge.
See I'm so upset for journalistic skills TTAC that im doing a repost if I've done some research, and got the following result.
Mercedes CL550 cost the US 110,400 Mercedes CL550 costs of EUR114,755 in Germany.
161.963 19 Mercedes CL550 costs in Austria from EUR140,990.
Same car, assembled in Sindelfingen, Germany wikipedia, the same cost of production further price difference is huge.
If ok, you say, Germany were Austria VAT sure, lets say its 20 20 for Austria, 19 for Germany to be exact above the base price, and lets you take the selling price of United States as the base vehicle price 110000 20 132000, which means that the German buyer pays at least 30,000 162,000- 132,000 the client United States or VAT NovaT How EQUAL wont go in the same FREAKING that the austrian discharges must pay almost double.
It is not a European markup is an American markdown Indeed, the world subsidize lower prices in the United States with rising prices almost everywhere else.
You want to know the truth why GM Chrysler FORD fooked up no, it is not coz crappy plastic dashes, poor reliability or unionworkers NO its coz they've been selling their primerely cars in the US market, and they had to sell cheap because fatazz Americans want the biggest, baddest, as mofo for pennies, but they had no other markets they could really milk to offset the losses they made on the market US allows us to see the presence of Chrysler in Europe any significant presence three Chrysler Dodge Jeep brands of GM Europe cadillac, saab, opel, while cadillac saab are negligible, that opel was volume guess its clear now why GM did not let go opel eh yes ford volvo ford had Landrover fordeurope only fordeurope is doing ok, they didnt go belly huh therefore now deviennen things t clear.
Shoutout to all manufacturers PLEASE grow BALLS AND EUROPEAN OR LET THAT OTHER CONSUMER subsidize FAT AMERICANS Fatties THE SHOW AND MIDDLE FINGERS CHARGE THEREFORE.
Kcflyer - very nice, if the car has a real back seat and space for legs that there Buick price reasonably, not like a Volvo or.
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The truth about the European prices of cars; Discounts up to 42%, truth, European prices.