The Ultimate Guide to Buying a Car: Hold Off on Registering to Save on Taxes

Car dealerships experienced a quiet period as customers held off on purchases ahead of the expected registration fee reduction. Photo: Phuong Lam.

In late May, the Ministry of Finance proposed a 50% reduction in registration fees for domestically produced and assembled cars. According to the proposal, this incentive could take effect from July 1st this year.

Customers Hesitant to Buy Now

This information caused many potential car buyers to pause their plans and wait for the upcoming promotion. Speaking to Tri Thuc – Znews, Mr. Hoang Lap from Ho Chi Minh City shared that although his family had considered purchasing a Mazda CX-5 at this time, they decided to wait to take advantage of the double benefit.

“My wife and I had planned to buy an SUV this year for both business and family use. We’ve been researching prices for the past two months, but now we’re hesitating because we heard about the potential reduction in registration taxes,” said Mr. Lap.

Customers are hesitant to buy now for fear of missing out on the registration fee reduction. Photo: Phuong Lam.

Like Mr. Lap, many others have also put their car-buying plans on hold, awaiting the government’s registration fee reduction. Despite attractive incentives from car manufacturers and dealerships, customers are still reluctant to make purchases at this time.

A salesperson at a car dealership in Ho Chi Minh City shared with Tri Thuc – Znews that the number of customers visiting the showroom has significantly decreased compared to previous years. Especially after the announcement of the registration fee incentive, visitors mostly inquire about the discounts and choose to wait.

According to this salesperson, even if the registration fee reduction takes place, customers may not benefit as much as they expect because manufacturers will likely reduce their incentives to optimize profits. This has happened during previous promotional periods and is likely to recur this year.

Specifically, instead of receiving a combined incentive equivalent to 150-200% of the registration fee, customers will only be eligible for cash discount programs offered by dealerships. The 50% registration fee reduction will be shouldered by the government.

However, with a cost-saving mindset, many customers still decide to postpone their car purchases, waiting for the registration fee reduction or seeking other solutions such as making a deposit to lock in both cash discounts and the 50% registration fee support.

Dealerships Accept Deposits, Postpone Registration Until After July

On social media groups, car buyers have been suggesting a strategy to buy the car now but delay the registration process to take advantage of both the dealership’s promotions and the government’s registration fee reduction.

Some customers have even paid in full at the end of May but have kept the car at the dealership, waiting until July to start the registration process and enjoy the incentives. However, this solution could unintentionally lead to legal issues if not carefully managed.

Circular 58/2020/TT-BCA on the Responsibilities of Vehicle Owners clearly states that after purchasing a vehicle and completing the payment process with a full invoice, the owner must fulfill all necessary procedures, including registration and payment of registration fees, or face late payment penalties of 0.05%/day calculated on the amount of tax owed.

“Within 30 days from the date of making the transfer of ownership documents, the organization or individual who buys, is assigned, given, allocated, or inherits the vehicle must go to the vehicle registration agency to complete the registration and license plate issuance procedures,” according to Article 6 of Circular 58/2020/TT-BCA on the Responsibilities of Vehicle Owners.

Dealerships allow customers to make deposits to secure the double benefit. Photo: TMV.

Understanding the needs of customers, many dealerships and distributors have decided to offer a deposit system, allowing customers to postpone the issuance of invoices until after the incentives take effect, thus optimizing their benefits.

When contacted, a car dealership in District 1, Ho Chi Minh City, confirmed that customers could make a deposit and pay the full amount during this period to enjoy the incentives from the dealership. Then, in July, when the registration fee reduction takes effect, the dealership will issue the invoice, allowing the customer to maximize their savings.

However, according to Tri Thuc – Znews’ survey, not all dealerships are willing to postpone invoice issuance until after July 1st. Mr. Chi C., a consultant at a Honda dealership in Ho Chi Minh City, mentioned that most dealerships do not require customers to pay in full and wait for the invoice date.

Mr. C. suggested that customers could make a deposit to secure the dealership’s incentives and then pay the full amount when the registration fee reduction takes effect. This solution helps buyers optimize their benefits without the burden of a large upfront payment.