A well-equipped Porsche Cayenne Coupe is a $150,000 car. In Turkey, though, buying cars is absurdly expensive thanks to a concept called “Special Consumption Tax.” Here’s how it turns the Cayenne Coupe into a $600,000 purchase, and how it affects other cars, too.
I realize that “Special Consumption Tax” is hardly a strong SEO term, and definitely not something that arouses excitement among most people. But the reality is that nothing influences worldwide car culture more strongly than emissions regulations and associated taxes. They’re the main reasons why families in Germany drive 1.0-liter VW Polos, while families in the U.S. drive 5.4-liter V8 pickups, and they’re key players in shaping the physical world, as well (America has entire communities — and tourist traps! — that rely upon major interstate travel).
Turkey fascinates me, because it may be the most expensive place to buy a car in the world.
The video above is a continuation of my Project Krassler series — stories that follow my journey in a 250,000 mile diesel, manual Chrysler Voyager that I bought sight unseen last year for $600, and spent a month fixing in order to limp the vehicle through Germany’s difficult inspection. In Tuesday’s video, you saw me hang out in Cappadocia, and pick up a hitchhiker (who sang to me and listened as I rapped Eminem lyrics) on my way back to Istanbul, where I had attended a wedding after driving a hellish 30 hours from Germany.
The video above shows me rowing through the Chrysler A568 five-speed transmission’s gears in Istanbul, where Jalopnik reader Aybek showed me the local car scene. He took me to a part of the city flooded with workshops. We drove down rows and rows of them, and spotted incredible machines.
What was most surprising to me was seeing so many American vehicles. The Jeep Cherokee XJ below wasn’t a huge surprise, since Jeep sold quite a few of these in Europe (the giveaway that this is an EU-spec Jeep is the diesel badging and the turn signal repeater on the fender), but the third-gen Pontiac Firebird under the tarp was definitely unexpected:
As was the plethora of Jeep Grand Cherokees, though admittedly, Jeep built quite a few of these in Europe (Graz):
If you’d asked me if there is a Chevy Avalanche in Turkey, I’d have guessed “no way,” but I’d have been wrong:
And check out this scene; I wouldn’t blame you if you said I took this photo in the U.S.:
There’s a second-gen Ford Explorer on the left side, a couple of Pontiac products behind it, a Chrysler Sebring on the right with two Jeep Grand Cherokee ZJs behind it, and a nice old purple Pontiac Bonneville headed down the road in front of us.
In one garage I saw a Dodge Challenger sitting next to one of its spiritual ancestors, an old DeSoto:
My favorite car, by far, wasn’t the DeSoto sedan in the picture above, but a DeSoto truck.
DeSoto Didn’t Die In The 1960s Like You Might Have Thought
This thing is fascinating, because it was built 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, like those sold in Spain and Argentina:
But even after the DeSoto name left those two markets, it continued to thrive in Turkey thanks to Askam, a truck company that Chrysler helped found in the 1960s. Hemmings breaks it all down:
De Soto and Fargo — the second nameplate was borne by a number of Chrysler-built Dodge trucks that were sold in Canada — continue as brands of light- and medium-duty trucks built in Turkey by Askam. Their stark, military appearance has an appeal all its own, and Askam trucks are pretty common sights on the roads and trails of the Near East. Askam essentially inherited the names, holdovers from its days as a Chrysler property. The company was formed by Turkish investors who joined forces with Chrysler, which was seeking an entry into the vehicle market in Turkey, where General Motors and Ford were already players. The first Askam truck with a De Soto badge was introduced in 1964
Turkey’s Unbelievably Expensive Cars
When we finished driving through the workshops and staring at cool American cars, Aybek and I headed to a place called the Doğuş Center, basically a gigantic car-shopping mall filled with showrooms.
It was there that Aybek explained to me why cars are so expensive in Turkey. The VW Touareg TDI shown above, for example, costs over 2.4 million Turkish Lira, or the equivalent of about $300,000.
This isn’t even a special Touareg, either. It has a 3.0-liter V6 making a modest 282 horsepower, and it’s not really outfitted with a ton of options. Car and Driver drove a European market V8 Touareg TDI recently, and that thing comes to around $100 grand when well-equipped, or $83,000 in base form.
Now check out this Passat:
It has a tiny 1.5-liter, 148 horsepower engine and cloth seats, and costs about $45,000. A base Passat in the U.S. seems to come better equipped (the base engine is a 174 horsepower 2.0-liter), and only costs about $30,000.
Then there’s 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 U.S., but in Germany, the car costs about 100,000 Euros, or $118,000.
The wildest thing we saw was the 5.2 million Turkish Lira Porsche Cayenne Coupe. That’s $622,000 for a car that, in the U.S., costs around $100,000. I’m not exactly sure which options this particular vehicle has, but even if you bought a Cayenne Coupe outfitted with every option, you’d struggle to get to a third of what this vehicle costs in Turkey.
As I mentioned before, and as Aybek discusses in the video, it mostly comes down to Special Consumption Tax, which is a Turkish government-mandated tax based on engine displacement and pre-tax sale price.
The table above shows overall tax rate on the right, VAT (Value Added Tax) just to the left of that, and Special Consumption Tax in the third column from the right. The VAT stays the same at 18 percent for all cars, but that’s a bit misleading, because that 18 percent is levied not just on the pre-tax price — it’s levied on the pre-tax price plus the Value Added Tax.
And that Value Added Tax is no joke. For any car that costs more than 130,000 Turkish Lira, or about $16,000 pre-tax (that’s most cars), the value added tax is 80 percent. So the total price of that car is the pre-tax price times 1.8. Then you have to add the VAT, which brings the total price to pre-tax price times 1.8 times 1.18. That’s 2.124 times the original asking price, or a total tax of 112.4 percent. Cars that cost more than about $16 grand and with engine sizes between 1.6 liters and 2.0-liters are taxed the same — 112.4 percent.
But when displacements reach about 2.0-liters, things get wild. The Special Consumption Tax for these vehicles (like the A8L, Touareg, and Cayenne shown above) is 220 percent. The VAT goes on top of that tax plus the pre-tax price. So the total price is pre-tax price plus the pre-tax price times 2.2 — that whole quantity times 1.18. That means the overall tax on the car is 277.6 percent!
So let’s just say the Audi A8L should cost about $118,000 like it does in Europe. Add that number to $118.000 times 2.2 and you get $377,600. Multiply that by 1.18 and you arrive at the total price of nearly $446,000, or roughly what the car is listed for at that dealership. Let’s say the Cayenne should cost $150,000; With taxes, that brings the price to $566,000, or not too far from the price I saw at the dealership.
Buying any car in Turkey is expensive, but buying larger-engined cars is downright punishing.