A must-read for novice drivers: A complete guide to the car buying process (Hong Kong)

Based on my personal experience, I will teach you step by step how to be a smart car owner in Hong Kong!

Hello everyone! I've been around Hong Kong for many years and have helped many friends and family buy and replace cars, and I've also made my share of mistakes myself.
Buying a car in Hong Kong is different from buying one in Taiwan, mainland China or abroad. There are many regionally unique regulations, taxes, and procedures, and you can easily fall into traps if you are not careful.
In this "Complete Guide to Buying a Car" article, the editor will take you from a novice's perspective and take you step by step to understand the complete process of buying a car in Hong Kong, the precautions , and the "landmines" that the business will not actively tell you!

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1. Budget planning: Buying a car is not just about the price!

First of all, when buying a car in Hong Kong, you must not only look at the price, because you also need to consider a lot of taxes, insurance, parking and future expenses.

The budget should include:

• Car price (new car, used car list price)
• First Registration Tax (FRT)
• Insurance costs (third party/full insurance)
• License fee/vehicle license fee
• Vehicle inspection, transfer and registration fees
• Parking space rental (this is very important in Hong Kong!)
• Gas, daily maintenance, tunnel fees, tolls
• Set aside a fund for emergency repairs

Editor's reminder:

• Parking in Hong Kong is extremely expensive, ranging from $2,500 to $5,000 per month for urban residential properties and even higher in shopping malls. Don't buy a car impulsively without a secure parking space.
• The first registration tax is high, especially for new cars, while for used cars it depends on the first landing value and year.
• The budget should also reserve a little buffer (the editor recommends +10%) to prevent unexpected expenses.

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2. Car selection objectives: purpose, model, fuel consumption, and size are all considered

Hong Kong has a small area and a large population, with narrow roads and many cars. When choosing a car, you should pay special attention to the body size, parking flexibility, fuel consumption, and whether the government promotes new energy vehicle incentives.

When choosing a car, consider:

• Daily use : commuting, sending children to school, visiting relatives, and taking a drive on holidays?
• Car model choice : compact car, RV, SUV, MPV, electric car?
• Fuel consumption and maintenance : Fuel prices in Hong Kong are high, so hybrid or electric vehicles are extremely popular.
• Parking and turning radius : Small cars are easy to park, but large MPVs may be difficult to move.
• Taxes and incentives : Some electric vehicles are exempt from first registration tax (please visit the Transport Department website for the latest policy in 2024).
• Brand reputation and repair outlets : Some affordable cars are difficult to repair and have expensive parts, so check carefully before buying.

Editor's suggestion:

• Do your research on local Hong Kong car websites such as "28Car" and "Car1.hk".
• Refer to real user reviews from the Consumer Council, car owner forums, and FB groups.

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3. New or used? Each has its pros and cons

New car (purchased from a dealership)

advantage:

• The latest technology and supporting facilities
• Enjoy original manufacturer's warranty (usually 3-5 years or specified mileage)
• Vehicle condition is guaranteed
  shortcoming:
• High first registration tax, price drops as soon as showroom opens
• Long waiting time for delivery (popular models may take six months to a year)

Used Cars

advantage:

• Price is lower than new car, depreciation is reflected
• Some "new second-hand" items are only used for 1-2 years and are cost-effective.
• Instant delivery possible
  shortcoming:
• Vehicle conditions vary, so you need to inspect it yourself or ask a third party to evaluate it.
• May not have original warranty
• If the previous owner has violated the law or had an accident, you need to pay more attention

Editor's experience:

• If a novice does not have a strong preference, it is recommended that he or she consider a used car first. In the event of an accident, the loss will be less and it will be easier to figure out what he or she really needs.

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4. Viewing and test driving the car: personal experience is key

Regardless of whether the car is new or old, seeing the car and test driving it are necessary steps.

Notes for viewing the car:

• Check the car body for obvious scratches and dents
• Is the interior clean? Are the seats and carpets moldy or have any odor?
• Check if there are any abnormalities in the dashboard, air conditioning, audio, navigation, etc.
• Windows, lights, trunk, and hood operate normally
• Check vehicle maintenance records, original manuals, and maintenance manuals

Test run highlights:

• Smooth start-up, no abnormal noise
• Steering, braking, and gear shifting are smooth while driving
• Test whether the air conditioner is cold enough
• Is it easy to enter and exit the multi-story parking lot?

Editor's suggestion:

• For used cars, you may consider looking for a third-party vehicle inspection company (such as the Automobile Association of Hong Kong, Car Inspection HK, etc.). The cost ranges from a few hundred to a thousand Hong Kong dollars, but it is definitely worth it to avoid buying a bad car.
• You can ask the salesperson to arrange a test drive for the new car so that you can experience it yourself before making a decision.

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5. Bargaining and Contracts: Smart Consumption Must Be Strived for

New car bargaining tips:

• Ask about the latest offers, cash discounts, finance plans, free gifts like navigation, insulation paper, carpets, etc.
• Don’t just trust the showroom price, Hong Kong car dealers sometimes “elicit newbies”.
• Ask several car dealers to compare prices and be brave to bargain.

Used car bargaining points:

• Check whether the vehicle has any outstanding debts, fines, or violations.
• Please ask the car owner or dealer to produce the latest vehicle inspection report.
• The confirmed price does not include transfer, vehicle inspection, insurance and licensing fees.

Key points of signing:

• All verbal promises must be written into the contract
• Confirm details such as vehicle model, year, registration number, delivery date, included accessories, etc.
• Pay a deposit (usually 10% of the car price, it is recommended to use bank transfer or check, and keep the receipt)

Editor's reminder:

• Never rush to place an order, and ask immediately if you are unclear about the contract terms.
• If you come across "extremely low prices" or "flash sales", be careful of traps and avoid scams.

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6. Applying for a loan: Common car loan options in Hong Kong

• Bank car loan : lower interest rates, stricter approval process, and proof of income is required.
• Finance companies : fast procedures, low thresholds, but higher interest rates.
• Car dealership financing plan : Installment payment plan launched in conjunction with new car purchases, some with zero interest discounts.

Required documents for application:

• ID card, proof of address
• Proof of income (payroll, tax bill)
• Car Purchase Contract

Editor's suggestion:

• Compare the interest rates and fees of different banks and finance companies, and don't just listen to the business's one-sided statement.
• Ask if there are any penalties for early repayment.

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7. Insurance Purchase: A Complete Guide to Mandatory and Optional Insurance

Hong Kong law requires all private cars to purchase third party insurance to protect the property and personal safety of others.
If you want to protect your car, you can choose Comprehensive Insurance .

Common insurance types:

• Third-party insurance : the most basic and low-cost, only compensates the other party's losses
• Comprehensive : Compensation for losses incurred by you and the other party, including theft, natural disasters, and fire
• Purchase optional coverage : such as driver personal accident, glass breakage, No Claim Discount (NCD) coverage, etc.

Editor's reminder:

• The quotes from different insurance companies vary greatly, so it is recommended that you compare more before making a decision.
• New drivers with less experience will have higher insurance premiums than experienced drivers.
• If you have a "No Claim Discount (NCD)", you can enjoy a renewal discount. Remember to keep it!

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8. Vehicle inspection and transfer: Don’t underestimate the details of the process

New car

• The dealership will be responsible for arranging the vehicle inspection and first registration, and the buyer only needs to provide proof of identity.
• Obtain a Vehicle Registration Document (commonly known as "vehicle body paper").

Used Cars

• It is recommended to inspect the vehicle in person or entrust a third party to ensure the condition of the vehicle.
• To process the transfer of ownership: both parties should bring their ID cards, vehicle body certificates, and fill in the TD25 form to the Transport Department.
• The Transport Department will check whether the vehicle has any violations, outstanding fines or unreleased mortgages.
• The transfer fee is approximately HK$1,000, payable by the buyer or by mutual agreement.

Editor's Note:

• The vehicle inspection report must be kept as it will be used in future transactions and claims.
• Remember to check all keys, remote controls, manuals, and maintenance records when handing over the vehicle.

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9. Licensing and vehicle registration: an essential step

• After buying a car, you must apply for a vehicle license (Vehicle Licence), which is generally valid for one year, and you must pay a license fee (calculated based on engine displacement, with discounts for electric vehicles).
• Only after obtaining a "vehicle license" can you legally drive on the road.
• Both new and old cars must be affixed with environmental protection labels and license plate stickers.
• If you want to customize your registration mark, you need to apply and pay for it separately.

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10. Vehicle delivery and acceptance: Careful inspection to protect yourself

• Check whether the body, interior, tires and lights are damaged
• Start the engine and check all dashboard warning lights
• Confirm again whether the accessories included in the contract (such as navigation, driving recorder, thermal insulation paper, etc.) are complete
• You can take photos as evidence when signing for the vehicle and keep the delivery documents

Editor's Tip:

• If you have any problems, report them on the spot and ask the dealer/owner to handle them immediately.

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11. Before a novice driver gets on the road: Check safety, documents, and parking

• Familiar with vehicle operation, all switches, navigation, and Bluetooth connection
• Carry your vehicle registration documents, insurance policy, and driver's license with you
• Arrange fixed parking spaces to avoid being ticketed for illegal parking
• It is recommended to purchase equipment such as a dashcam, emergency flashlight, and tow rope.

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12. Car maintenance and daily expenses: long-term planning is essential

• Regular maintenance as recommended by the manufacturer or dealer
• Keep an eye on maintenance records and receipts to help with future resale
• Park carefully. Hong Kong has a high rate of car collisions. Install a dashcam as soon as possible.
• After buying a car, you need to renew the insurance, license plate, and vehicle inspection every year (starting from six years old)

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【Summarize】

Although buying a car in Hong Kong involves many procedures and is expensive, there is no need to be afraid as long as you do enough research in advance and follow the steps!
The editor reminds you again: the budget must be considered comprehensively, and every step must be documented, recorded, and verified . Don't be greedy for small profits, and don't be afraid of trouble.
If you have any questions, please feel free to leave a message or send a private message to the editor. I wish everyone can successfully buy their dream car, be safe and happy and be a smart Hong Kong car owner!

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[Feel free to share this article with friends who are considering buying a car!]
If you have any questions, please leave a message at any time and the editor will do his best to answer them!