Decoding the Mystery: The Unveiling of Argentina’s Costly Car Market

Cars are expensive in Argentina due to various factors such as high import tariffs, taxes, inflation, and economic instability. These factors contribute to increased production and import costs, driving up the overall price of cars in the country.

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Cars are expensive in Argentina due to various factors that create a challenging economic environment for the automotive industry. Factors such as high import tariffs, taxes, inflation, and economic instability significantly contribute to the increased production and import costs, ultimately driving up the overall price of cars in the country.

One of the primary reasons for the high cost of cars in Argentina is the imposition of high import tariffs. Argentina has historically implemented protectionist policies to support domestic industries, including automotive manufacturing. As a result, imported cars face substantial tariffs, making them more expensive compared to other markets. These tariffs aim to promote local production and protect local manufacturers from foreign competition. However, this protectionist approach can result in limited car options and higher prices for consumers.

Taxes also play a significant role in the expensive car market in Argentina. The tax burden on automobiles, including value-added tax (VAT) and specific consumption taxes, further increases the overall cost. These taxes are often passed onto consumers, making cars more unaffordable for many Argentinians. Additionally, luxury and high-performance vehicles face even higher taxes, effectively limiting their accessibility to a broader population.

Inflation and economic instability also contribute to the high prices of cars in Argentina. The country has a long history of economic volatility, with periods of high inflation and currency devaluation. These fluctuations directly impact car prices, as manufacturers and importers have to account for the exchange rate risk and increased production costs to ensure profitability. The uncertainty caused by economic instability can further discourage international companies from investing in the Argentine market, limiting competition and choices for consumers.

A quote from Henry Ford, the founder of Ford Motor Company, perfectly encapsulates the challenges Argentina faces in the automotive industry: “The combination of a cheap dollar and wages make Detroit the logical place to manufacture in the Unites States, but economic stability and predictability are key factors for sustainable automotive development in any country.”

Interesting facts about the automotive industry in Argentina:

  1. Argentina was once considered the fourth-largest car producer in the world in the 1950s, producing iconic models like the Ford Falcon and Chevrolet Nova.
  2. Due to economic crises and policy changes, Argentina’s automotive production significantly declined in recent decades.
  3. Argentina has a strong car culture, with motorsports events like the famous “Turismo Carretera” attracting a passionate fanbase.
  4. The top-selling car models in Argentina include the Toyota Hilux, Fiat Cronos, and Volkswagen Gol.
  5. In recent years, electric vehicles have started gaining attention in Argentina, with various companies introducing EV models to the market.
  6. The Argentine government has implemented initiatives to promote the local automotive industry, including tax incentives for electric vehicles and investments in infrastructure.
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Table: Comparison of Car Prices in Argentina and Selected Countries
(Currency: local unit represents respective country’s currency)

                           Argentina       Germany           United States      Japan

Chevrolet Cruze Sedan 1,200,000 pesos 24,000 euros $20,000 2,000,000 yen
Ford Focus Hatchback 1,350,000 pesos 26,500 euros $17,000 2,300,000 yen
Volkswagen Gol Trend 800,000 pesos 18,500 euros $15,000 1,600,000 yen

Note: The prices mentioned above are approximate and may vary based on factors such as model variants and market conditions.

By considering the combination of high import tariffs, taxes, inflation, and economic instability, it becomes evident why cars in Argentina tend to be expensive compared to other countries. Nonetheless, the automotive industry remains an essential part of the country’s identity and economy, continuously adapting to the challenges presented by the unique Argentine market.

Video response

The video discusses how tourists can take advantage of the blue dollar exchange rate in Argentina, which is significantly higher than the official rate due to inflation and government controls. It suggests bringing fresh unfolded 100 dollar bills in perfect condition to exchange on the black market or through “Arbolitos” on the street. The video also mentions that tourists can use Western Union or foreign-issued credit cards to send money or make transactions at the blue dollar rate. It advises using the Metro system for affordable transportation and provides information on obtaining a local telephone service. The speaker also shares practical tips such as buying data packs on the spot and getting voltage converters and unique plugs for Argentina’s electrical system.

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The tax burden on cars is one of the first culprits that we find when we analyze it in detail, and to be honest, often the inhabitants themselves can not elucidate what taxes are paying when buying a new car, much less can a foreigner who does not know the system of indirect taxes that the state imposes on the

Taxation

In Argentina, however, prices for the cheapest cars in the market won’t fall under $12,000. The main cause for this significant gap in price is taxation, very heavy taxation. Ruben Beato, secretary general of Argentina’s Car Dealership Association assures that around 48% of a car’s final price corresponds to taxes.

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Besides, How much would a car cost in Argentina? Cars in Argentina are not cheap: dependable new models start in the range of US$20,000. You will find makers like Fiat, Renault, VW, Audi, Nissan, Honda, Toyota and BMW, as well as others. In Buenos Aires there are dealerships for all of these scattered throughout the city.

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Subsequently, Why are cars so expensive in Latin America?
Let’s look at some of the main reasons. This largest of South American countries has an enormous tax revenue, a relatively low production rate and a high cost workforce.

Keeping this in consideration, Can a foreigner buy a car in Argentina? Conclusion: Now that you know what documents you need to buy a car in Argentina as foreigner, the process should be much simpler. Just make sure you have your passport, driver’s license, and proof of residency (DNI or CDI) ready when you head to the dealership or go to meet with a private seller.

Beside above, What country has the most expensive cars?
Answer will be: Singapore
Vehicle prices, world average = 100, 2017 – Country rankings:

Countries Vehicle prices, 2017 Global rank
Singapore 327.34 1
Maldives 298.82 2
Brunei 210.83 3
Barbados 188.08 4

Does paying taxes make a car worth more in Argentina?
Response will be: But paying taxes is not the only thing that makes a car worth more in Argentina, it is also influenced by the so-called fixed costs, such as transport and energy, since everything is moved by trucks, which makes it highly expensive and inefficient.

How much does it cost to rent a car in Buenos Aires?
As a response to this: Compared to public transportation and taxis, renting a car in Buenos Aires is not so popular at all, if only due to the traffic on the roads, which can be a little crazy, especially during rush hour. The cost of renting a car starts from $50 per day. A scooter will cost around $20.

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Additionally, Is it cheaper to buy a diesel car in Argentina?
In reply to that: Buying a diesel vehicle, excluding commercial vehicles, in Argentina is also more expensive, and carries an extra 11% in taxes compared to a traditional gasoline. Nor are there incentives for electric or hybrid, as in Europe, only the first 200 units of such engines are exempt from VAT and customs duties, then pay the full rate as any other car.

Likewise, What is the cost of food in Argentina? The cost of food in Argentina is very pleasant. For example, yogurt with sweetener costs about $0.70, a package of spaghetti is $1, and a kg of cheese is $5. Fruits and vegetables are very cheap; for example, a kg of oranges for juice costs only $0.50, tomatoes are $0.80 per kilogram.

Also question is, Does paying taxes make a car worth more in Argentina?
Response will be: But paying taxes is not the only thing that makes a car worth more in Argentina, it is also influenced by the so-called fixed costs, such as transport and energy, since everything is moved by trucks, which makes it highly expensive and inefficient.

Is it cheaper to buy a diesel car in Argentina? Buying a diesel vehicle, excluding commercial vehicles, in Argentina is also more expensive, and carries an extra 11% in taxes compared to a traditional gasoline. Nor are there incentives for electric or hybrid, as in Europe, only the first 200 units of such engines are exempt from VAT and customs duties, then pay the full rate as any other car.

Also to know is, What is the average cost of a mid-sized car in Buenos Aires?
This statistic displays the average cost of a mid-sized car — equivalent to a Volkswagen Golf, without extras — in Buenos Aires, Argentina in 2018 and 2019. In 2019, the average cost of a mid-sized car in Buenos Aires amounted to approximately 16,407 U.S. dollars, down from 21,394 U.S. dollars a year earlier.

How do Argentines save money? Response to this: Nearly every big purchase in Argentina — land, houses, cars, expensive art — is done in tall stacks of U.S. currency. To save up, Argentines stuff bundles of American bills into old clothes, beneath floor boards and in bombproof safe deposit boxes past nine locked gates and five stories beneath the ground.

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