a well equipped Porsche Cayenne Coupe A car worth $150,000. In Turkey, however, buying a car is absurdly expensive because of a concept called a “special consumption tax”. Here’s how it turns the Cayenne Coupe into a $600,000 buy, and how it affects other cars as well.
I realize that “special consumption tax” is hardly a strong SEO term, and certainly not something that sparks excitement in most people. But the reality is that nothing affects car culture around the world more than emissions regulations and related taxes. They’re the main reason families in Germany drive 1.0-liter VW Polo, while families in the US drive 5.4-liter V8 pickups, and they’re major players in shaping the physical world, as well (there are entire communities in the U.S. – and Tourist traps! – which depend on major interstate travel).
Turkey fascinates me, as it may be the most expensive place to buy a car in the world.
The video above is my . is a series of Project Chronicler Series – The stories that follow my journey in the 250,000 mile diesel, the manual Chrysler Voyager I bought last year for $600 over the unseen sight, and a month’s time in fixing the vehicle to limp through Germany’s difficult Spent. Inspection. In Tuesday’s video, you saw me walking around Cappadocia, and pick up a hitchhiker (who sang for me and sounded like I rapped an Eminem song) on the way back to Istanbul, where I attended a wedding after hellish driving 30 hours from Germany.
The video above shows me rowing through the gears of a Chrysler A568 five-speed transmission in Istanbul, where Jalopnik reader Aybek showed me a local car scene. He took me to a part of town full of workshops. We trotted down their rows and rows, and looked at the incredible machines.
What was most surprising to me was seeing so many American vehicles. The Jeep Cherokee XJ down there wasn’t a big surprise, as Jeep sold a few of these in Europe (it’s cheap considering it’s an EU-spec Jeep with diesel badging and a turn signal repeater on the fenders), but under the third-gen Pontiac Firebird tarp. The was definitely unexpected:
As did most of the Jeep Grand Cherokee, although Jeep is believed to have built some of these in Europe (Graz):
If you were to ask me if there is a Chevy Avalanche in Turkey, I would have guessed “no way”, but I would be wrong:
And look at this scene; I wouldn’t blame you if you said I took this picture in America:
To the left is a second-gen Ford Explorer, behind it a pair of Pontiac products, to the right is a Chrysler Sebring with two Jeep Grand Cherokee ZJs behind it, and a good old purple Pontiac Bonneville drove down the road in front of us.
In a garage I saw a Dodge Challenger sitting next to one of its spiritual ancestors, an old DeSoto:
My favorite car, by far, was not the DeSoto sedan in the picture above, but a DeSoto truck.
DeSoto Didn’t Die in the 1960s Like You May Have Thought
This thing is fascinating, as it was made well after the death of Chrysler’s DeSoto brand in the early 1960s. Chrysler continued to use the DeSoto name on foreign-market Dodge trucks, such as trucks sold in Spain and Argentina:
But even after the DeSoto name left those two markets, it continued to flourish in Turkey, thanks to Askum, a truck company that Chrysler helped found in the 1960s. hemmings It breaks it all:
De Soto and Fargo – the second nameplate borne by several Chrysler-made Dodge trucks that were sold in Canada – continue as brands of light and medium-duty trucks manufactured in Turkey by Askum. There is an appeal in their tough, military appearance, and Ascam trucks are fairly common sights on the streets and trails of the Near East. The Askum essentially inherited the name, holdover, from its days as a Chrysler property. The company was formed by Turkish investors who joined forces with Chrysler, seeking entry into the vehicle market in Turkey, where General Motors and Ford were already players. The first Askam truck with the De Soto badge was introduced in 1964
Incredibly expensive cars of Turkey
When we finished driving through the workshops and saw cool American cars, Aybeck and I headed to a place called Dogs Center, basically a huge car-shopping mall full of showrooms.
It was there that Aybek explained to me why cars are so expensive in Turkey. For example, the VW Touareg TDI shown above is worth 2.4 million Turkish lira, or approximately $300,000.
It’s not even a special Touareg. It has a 3.0-liter V6 that makes a modest 282 horsepower, and it’s not really outfitted with a ton of options. Car and Driver drove a European market V8 Recent Touareg TDI, and that thing comes to about $100 grand when well equipped, or $83,000 in base form.
Now look at this Passat:
It has a 1.5-liter, 148 horsepower engine and cloth seats, and costs around $45,000. A base Passat in the US seems better equipped (the base engine is a 2.0-liter making 174 horsepower), and costs around $30,000.
Then there is the Audi A8L shown above. It has a 3.0-liter diesel and costs 3.7 million Turkish lira, or about $440,000. Audi doesn’t sell the A8L in the US, but in Germany, the car costs around 100,000 euros, or $118,000.
The wildest thing we saw was a 5.2 million Turkish Lira Porsche Cayenne Coupe. That’s $622,000 for a car, which costs around $100,000 in the US. I don’t know exactly what options this particular vehicle has, but even if you bought a Cayenne coupe with every option, you would struggle to get a third of the price of this vehicle in Turkey.
As I mentioned earlier, and as Aybek discusses in the video, it mostly comes down to the Special Consumption Tax, a tax mandated by the Turkish government based on engine displacement and pre-tax sales price.
The table above shows the overall tax rate on the right, VAT (Value Added Tax) on its left and the special consumption tax in the third column from the right. VAT remains the same for all cars at 18 per cent, but this is a bit misleading, as this 18 per cent is not only levied on the pre-tax value – it is levied on the pre-tax value. plus special consumption.
And that special consumption tax is no joke. For any car that costs more than 130,000 Turkish lira, or about $16,000 pre-tax (which is most cars), the special consumption tax is 80 percent. So the total cost of that car is the pre-tax price times 1.8. Then you have to add VAT, which brings the total price to 1.8 times 1.18 times the pre-tax value. This is 2.124 times the original asking price or 112.4 percent of the total tax. Cars costing more than about $16 and with engine sizes between 1.6-liter and 2.0-liter are taxed the same – 112.4 percent.
But when the displacement jumps to around 2.0-litres, things get wild. The special consumption tax for these vehicles (such as the A8L, Touareg, and Cayenne shown above) is 220 percent. VAT goes on top of that tax plus the pre-tax value. So the total price is the pre-tax price plus the pre-tax price times 2.2 – that’s the whole quantity times 1.18. That is, the total tax on the car is 277.6 percent!
So let’s say the Audi A8L should cost around $118,000 like it is in Europe. Add that number to $118,000 by 2.2 and you get $377,600. Multiply this by 1.18 and you arrive at a total price of about $446,000, or roughly what the car is listed for at that dealership. Let’s say the Cayenne should be priced at $150,000; With taxes, that brings the price up to $566,000, or not that far from the price I’ve seen at dealerships.
Buying any car in Turkey is expensive, but buying a car with a large engine is strictly punishable.