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How to buy a car in Indonesia? The car buying process in Indonesia is of interest to many expatriates and tourists who want a comfortable means of transportation. Foreigners have the right to purchase personal transportation, but under certain conditions, which we will discuss below.
Content:
- Can foreigner buy car in Indonesia?
- Car registration, Indonesia
- Driving rules
- Driving license in Indonesia
- How many cars in Indonesia and which car to buy in 2024?
- Vehicle Tax in Indonesia in 2024
- Buying a new car on the island
Local Indonesians mainly use light motorcycles and scooters to move. Firstly, they can navigate through traffic jams more quickly. Second, these so-called motorbikes are inexpensive and not subject to high taxes.
Automobiles are affordable for wealthy citizens or companies that use transportation with commercial purposes. Despite some nuances in the documentation process, buying an auto as a foreigner is no more complicated than buying property in Indonesia.
The most common types of transport are 4-door sedans and vans. Luxury ones are less common and are not in high demand in the local market.
An automobile is considered a luxury item in this hot country, so taxes are added to the actual cost. That’s why cars are expensive in Indonesia.
The process of buying transport in an Indonesian showroom is relatively straightforward and does not require visits to various government agencies. All stages, from the transaction to the issuance of the license plate, are handled by the dealership staff with minimal involvement from the buyer. Let's take a closer look at all the details involved in buying an auto.
Can foreigner buy car in Indonesia?
A foreigner can only purchase an automobile if they have a permanent or temporary residence permit in the country (KITAP or KITAS, respectively). However, many foreigners circumvent this requirement by registering the vehicle under an Indonesian name.
If an expatriate is officially employed, it is easier for them to register the purchase under their employer's company. The main documents required to register are a valid passport, KITAP or KITAS.
Car registration, Indonesia
Locals prefer to purchase autos and motorcycles on credit. Most Indonesian banks do not provide credit to foreigners. However, some venture finance companies allow immigrants to lease it. Such a deal can be arranged through the dealership. In this case, the buyer must provide these car registration documents:
- A valid passport;
- KITAP or KITAS;
- A letter from the employer guaranteeing loan payments in case of default;
- A purchase order from the dealer;
- An initial down payment.
Upon completion of the transaction, the buyer will receive the following documents:
- A registration certificate (STNK). It is advisable to keep this document in the transport at all times, as it will be checked by the police if you are stopped;
- License plate;
- Certificate of ownership (blue or red book). It is advisable not to carry this document with you, as in the event of a theft, the transport can be easily resold together with the certificate;
- The original receipt of payment;
- the receipt of the actual cash transaction.
STNK and license plates are issued approximately one week after the transaction. The buyer is allowed to take the auto home immediately after payment, but it is forbidden to drive it without the license plate and the title.
Driving rules
As in many Asian countries, driving on Indonesian roads is very chaotic and disorderly. Tourist areas, including the popular island of Bali, suffer the most from traffic congestion. The roads are dominated by mopeds, motorcycles, tuk-tuks and other local forms of transportation. The main driving rules here are:
- Drive on the left;
- The speed limit in urban areas is 30–40 km/h;
- Mandatory use of dipped headlights while driving;
- No cell phone use while driving;
- Driving without side mirrors and with non-functioning headlights is prohibited;
- Turns and maneuvers must be accompanied by appropriate signal lights.
Despite hefty traffic violations fines, local motorcyclists and drivers often ignore them. As an example, truck and bus drivers rarely yield to smaller vehicles, even when they are required to do so. It's also worth noting that traffic organization on certain roads may differ at different times of the day. As an example, there may be two-way traffic during the day and one-way traffic in the morning. There are usually no warnings about these changes. In addition, it's important to note that Indonesian roads are often unmarked, and pedestrians cross streets wherever they please, which also poses challenges with inexperienced drivers.
Therefore, foreigners may need some time to get used to the traffic and the peculiarities of local drivers and pedestrians.
Driving license in Indonesia
In Bali and other regions of the island, it's not uncommon to see children riding scooters. Many wonders if you need a license to drive a scooter. According to local law, you must have the appropriate category of driver's license to operate a vehicle. However, locals often use purchased documents or simply bribe police officers in the absence of a license.
However, if you plan to stay in Bali permanently and drive an auto or motorcycle, obtaining an International Driving Permit (IDP) is the best option. It doesn't replace the primary licenses but serves as a supplement to them. You can easily get this document in Russia at the State Traffic Safety Inspectorate or the Multifunctional Center of Public Services. The IDP is valid three years, but not longer than the validity of your driver's license.
If you're planning a short trip to an Indonesian resort and have decided to travel exclusively by motorcycle, you can obtain temporary driving permits that are valid 1 month. These permits only allow you to drive a motorcycle.
How many cars in Indonesia and which car to buy in 2024?
Customs clearance in Indonesia is expensive. Vehicles imported into the country are subject to a duty of approximately 300% of their value. Customs officials determine the calculated price. That’s why it is completely disadvantageous for a foreign citizen to transport his transport. Buying a vehicle locally will be cheaper, despite the tax.
In addition, the Indonesian government has imposed a ban on the use and import of transport with an engine capacity of more than 3000 cc.
One of the car buying rules in Indonesia is that vehicles transported across the border must be new. Exceptions are granted only to holders of diplomatic passports and special permits.
Despite the bans, locals have learned to illegally transport used vehicles with rolled back mileage, which are then disguised as new when they cross the border. Premium autos with engines larger than 3000cc are also transported with forged documents. How to buy a used car in Indonesia and not get into trouble? If you are considering buying such an auto, be aware that it may be difficult to resell, and if the illegal scheme is discovered, it could lead to confiscation.
Vehicle Tax in Indonesia in 2024
How to register car in Indonesia? SAMSAT is a government agency that registers vehicles and collects road tax and vehicle tax in 2024.
Only 20% of Indonesians own a private transport, so it is considered a luxury item. Dealers pay high duties on imported transport, making imported models much more expensive than domestically produced models. Most Indonesian automobile factories are owned by Japanese companies. Not surprisingly, the most common brands in the country are Toyota, Daihatsu and Honda. European brands, which are popular in Russia and the CIS, are much rarer due to high tariffs.
There are two main transport taxes:
- Registration tax (transfer of ownership) of 10% or 20% (in Jakarta) of the purchase price;
- Annual vehicle tax – approx. 2% of the appraised value.
In Jakarta there is an additional progressive tax for owners of 2 vehicles. A tax of up to 10% of the assessed value is levied on the second vehicle. The exact rate depends on the condition and auto brand.
When a vehicle is sold, a value-added tax of 10% of the appraised price is also charged. An annual insurance premium is also required. Do not overlook insurance as accidents are common due to the heavy traffic on the roads.
Buying a new car on the island
Buying a new transport is the easiest way to acquire a reliable means of transportation. When you make a deal through a dealership, you put in minimal effort to process the necessary documents. In addition, a new purchase comes with a warranty and maintenance.
To purchase a vehicle on the island, the buyer must present a valid passport, KITAS or KITAP (for foreigners) or identity card (for Indonesians).
If the buyer has a valid KITAS and a letter from the sponsoring company, the buyer may purchase an automobile in their name.
If a foreign employee is sponsored by the employing company, he/she must provide copies of the following documents:
- Business permit;
- Tax number;
- Certificate of Residence (Surat Keterangan Domicili);
- Company Certificate (Akte Perusahaan).
Fuel costs
In 2023, fuel prices rose across the globe, and the Indonesian market was no exception. With motorcycles and scooters being the primary mode of transportation in the country, locals often opt for more budget-friendly gasoline options. The main types of fuel available at local gas stations include:
- Premium – equivalent to AI-88;
- Pertalite – equivalent to AI-90;
- Pertamax – equivalent to AI-92;
- Pertamax plus – equivalent to AI-95;
- Pertamax turbo – equivalent to AI-98.
Premium fuel is of low quality and is strongly discouraged for use in automobiles. It is also not recommended to purchase gasoline in bottles at the roadside. The most acceptable fuel is called Pertamax. The cost of this gasoline ranges from $0.9 to $1.15 per liter.
Conclusion
For Indonesians, a car is a luxury, but that doesn't mean it's inconvenient for navigating the busy streets. If you have the opportunity to purchase it, it's better to do so. Traveling in a private car with air conditioning is much more comfortable than on a motorcycle or in crowded public transportation. It's also an indispensable option for families with children traveling around the city. Considering the chaotic road conditions, traveling by car is much safer.
If you're considering moving to Bali or another sunny Indonesian city, it's worth thinking about comfortable living along with buying a vehicle, especially since foreigners can now purchase apartments in Indonesia for private ownership.
On our website you'll find a wide range of property options to suit all tastes and budgets. We work directly with developers and agencies, so our clients are among the first to receive advantageous offers for the sale of apartments and villas in Indonesia. In addition, they can choose ready-made investment cases directly from the developers.