Government taxes affect the price of a car more than the cost of production.

Turkey has the highest tax burden on owners of private vehicles in Europe, while much wealthier France and Luxembourg offer citizens significantly more favorable conditions for purchasing a car. But here it is important to know about a number of nuances, writes Euronews.

It is noted that taxes associated with the acquisition, registration and use of vehicles have traditionally been simply one of the sources of replenishment of the state budget. So, in most European countries, including Turkey, people pay about 20% VAT when buying new cars. Only in some countries this rate is significantly higher – 27% in Hungary and 25% in Sweden, Denmark and Croatia.

But today, European governments are also using vehicle taxation to influence consumer behavior by pushing them toward environmentally friendly actions. Therefore, the main reason for the large difference in car prices in different countries is not VAT, but other taxes, fees and bonuses, which are primarily aimed at promoting environmentally friendly cars.

For example, an electric car of category “A” (SUV/hatchback with a 150 kW (204 hp) engine, a battery capacity of 58 kWh, consumption of 17 kWh/100 km, weighing 1730 kg, and a battery range of over 400 km) in most European countries costs from 31 to 39 thousand euros. But in France it costs on average about 26.9 thousand euros, and in Turkey – 59.1 thousand.

This difference in prices is explained by the fact that in France there is a huge “green bonus” when purchasing an electric car, when the state actually compensates for part of the cost of the new electric car and all the taxes provided. In other countries, this bonus is smaller, so the final price of the car is higher. But in Turkey, on the contrary, there are high taxes on the purchase of a car (in addition to VAT, “luxury” taxes are paid), but there are no bonuses for buyers of electric vehicles.

With internal combustion engine cars, the overall dynamics are similar, although taxes are significantly higher than for electric vehicles. Thus, in Turkey, a car with an internal combustion engine costing about 47.5 thousand euros after paying all taxes will cost the owner as much as 179.2 thousand euros. In EU countries, taxes are lower, but still quite significant. The mentioned car in Denmark will cost 146.7 thousand euros, in the Netherlands – 122.8. And the cheapest such car will be in Sweden – only 59.3 thousand euros.

Ukrainians are abandoning cars with internal combustion engines

As wrote, the demand for electric vehicles has increased significantly in Ukraine. Thus, in November, Ukrainians purchased more than 4 thousand electric vehicles, which is three times more than in November last year. In total, since the beginning of the year, Ukrainians have bought 33 thousand electric vehicles, which is also almost three times more than last year.

The popularity of cars with hybrid engines is also growing. In November, 1,704 such vehicles were added to the Ukrainian vehicle fleet, which is almost twice as many as last year.