Dec 8, 2021

Buying a Car in the Philippines

Go where no Grab will take you.

So, you want to buy a car in the Philippines?

It's an inverse market, what is cheap in USA or Japan, is expensive in the Philippines and usually viceaversa.

There are great deals, and lots of issues - so this is a general guide for buying a USED car. Buying a new car is a easy process, but unlike in the USA, you go to a dealership and you ORDER it. Sometimes you may get lucky and get a promotion or sale, but there is a huge supply issue, that the Dealer doesn't really care. You will not get a special by going at the end of the month, holidays or such.

Is it worth it?

Yes, owning a car in the PH is true freedom, you do not need to wait forever for grab drivers, which can get expensive and deal with horrible drivers, bad cars, cheap cars and general annoyances. Average commute cost from BGC to Oritgas used to cost me 500P one way. BGC to QC would be 750PHP+.

Renting a car in the PH is possible, but I find the market quite exhausting and picky. A Wigo rents for about 1250 PHP daily, a vios about the same. There aren't any discounts for weekly/monthly usually.

Gas is expensive, about 50 pesos a liter, so $1/liter or $4/gallon. Sometimes it goes down to 42Pesos, and sometimes it goes up to 55Pesos/liter.

While most of the world is going to "Electric cars" most of Southeast Asia is not, it simply can't - yet. Infrastructure is not there yet, and fossil fuels is still best for the buck to get around. There is also an emerging middle class that can afford $7-20,000 cars "NEW" while most electric cars start at a minimum of $35,000 USD, base - Tesla 3.

A typical basic Toyota Wigo (which is really a Daihatsu) goes new for 568,000 PHP, or under $11,500 - https://toyota.com.ph/wigo quite expensive when compared to ASEAN neighbors like Indonesia, where the same Model goes for base price of 350,000 PHP.

Philippines Wigo Price and option spec. AT means Automatic M/T means Manual Transmission.

Meanwhile in Indonesia...

Same car, but PH is just $$$ for not much more. But no matter what the Wigo/Ayla/Agya is a crappy car. I took it driving on NLEX and hit 125KM/hr and the AC belt came off, which also runs the water pump. LOL.

New Car Purchase?

Buying a new car is a semi-easy process, but unlike in the USA, you go to a dealership and you ORDER it. Sometimes you may get lucky and get a promotion or sale, but there is a huge supply issue, that the Dealer doesn't really care. You will not get a special by going at the end of the month, holidays or such.

You go to a dealer, you kinda know what you want, they may have a floor demo, you go drive it, you pick the color you want, they'll give you a delivery date and that's that. If it's manufactured locally in the PH, you'll get it alot quicker, if it's imported, they are super expensive as they're taxed higher and longer wait time.

Banks will finance foreigners if you have an appropriate visa, any visa, can be 9A or 9G. It depends on your relationship and your assets. HSBC & BDO are foreigner friendly and they'll finance you - it's expensive.

https://www.bdo.com.ph/mobile/personal/loans/auto-loan

Basically for BDO:
2 Years residency in PH, can be on and off, but if you can show a lease, or have an account open for 2 years, you qualify. Max 5 year loan, 3 year loan - 10% APR, 5 year loan 11%. Ouch. Compared that to 0% loans in USA.

What Cars to buy?

Can be anything, I prefer Honda. They're great value, parts are all around available but older models can be tricky. My Gen 1 Honda CR-V has some expensive parts locally, but if I order from China, JP, Indonesia or USA it's not an issue. Power steering hose for example, silly, but couldn't find it anywhere OEM, had to have it custom made.

RHD cars to exist, they were "grey" imports, they are hard to resell. Technically "not allowed" but it's the PH. I wouldn't get one though.

Landcruisers, old Japanese classics and such are available, not to valuable in Philippines.

Ford , but I think the selection is meh. Fiesta is nice, Ecosport are available and they have Everest and Rangers. Rangers are great, but overpriced, even new. Everest, same. In Indonesia and elsewhere in SEA - they're not as coveted because they're expensive in parts and fuel.

I found the CR-V the most all around best car. But a sedan, or other car may be to your liking. Before you jump on one, look at the parts costs and tools for your own maintenaince. Labor is cheap, even at the dealership - but dealerships are always overbooked and will honor insurance repairs first. If you don't mind going outside NCR, even better, you can get same day bookings through dealerships.

Mechanic shops do exist, there are franchises like Goodyear, but it's all 50/50. It's the same as in USA, word of mouth is best. I also would suggest preventative maintenace 100%, don't cheap out on tires, and have a battery backup/jump start, they're cheap on shopee/lazada.

Back to Philippines!

LTO, Licensing, Legality.
Yes, foreigners can own a car.

LTO = Land Transit Office, it's the "DMV" of the Philippines. The provinces in the Philippines do not do licensing, it all is centralized through the local LTO branch.

For used cars:
There is a thing such as an LTO Alarm, this means the car may have a unpaid balance, may be expired plates or stolen. This is easy to check, you need to be within the Philippines and litereally "Text" a shortcode SMS number.

I find it the most silliest thing, but it's a thing in the Philippines.

Number Coding

What number the plate ends in is what days you can drive in main places/Metro Manila. 1-2 = No Monday. 3-4 = No Tuesday, etc. This is also highly dependent where you go, even though Taguig is within NCR/Metro Manila, there is no number coding. But if you go within normal "Manila" on the day that you are "coded" for, you can be stopped by an enforcer.

Depending on how good your tagalog is/how you look/what kind of car you have - you may be able to get out of it by apologizing, or paying a fine on the spot. 500-1000 PHP is usually good enough.

Usually in the Philippines if you get at ticket, or a fine, you have to surrender your license, and you get it back when you go to city hall / police station to pay the fine. The fines are not that expensive, 100-2000 PHP, but the amount of time can be half day or more. It is usually avoided.

Bank Auctions

All the main banks in the Philippines offer car auctions. I don't think they're a good deal. The cars are usually beat up, and go for the same market price on facebook and such since they are open to the public. You need to pay within 3 days, otherwise you forfeit your deposit.

BPI - https://www.buenamano.ph/
BDO - https://www.bdo.com.ph/properties-for-sale/vehicles
There are several more banks, EASTWEST, HSBC, Chinabank, etc. They all have a similar process.

Papers, Title, Ownership, OR/CR.

This is the fun one, so, lots of cars have muddy titles, many people do not pay taxes, and the LTO alarm does not matter. If you want to get it legally in your name, you need to pay all back taxes, LTO fines because of late registration and more.

This is 50/50, it's commonly accepted to NOT pay the LTO fees, the insurance and such can be tricky indeed, but insurance for liability also does not extend to old cars - if you contact brokers, and the car is over 15 years old, many will not cover it.

This is the most important piece of paper for the car, it shows ownership, that it's registered and legal and will be shown to Enforcers/Police in a traffic stop if it has to be.

By not paying registration, or transferring the OR/CR to new owners name, then the title becomes muddied. Most of the time, having a OR/CR and the car physically means you own it - but getting insurance can be an issue, some issuers car, some don't - (Standard Charter).

And it makes sense, annual cost to renew OR/CR can be from 3000-9000 PHP depending on weight, age of car and type.

Where to find used cars?

Facebook marketplace is the best.
OLX/Carousell
Around town.
Used Car Dealerships, automobilco and such - but they're more interested in financing than cash price. You can sometimes find bargains though if it's old enough or niche enough.

The most indemand car is a MPV, or multi purpose vechicale. This means it seats 5-7+ easily. not SUV as they're classed differently and are more expensive. This means coupes, luxury cars and convertibles go for cheap because of less market demand. Most Filipinos can only afford "one" car.

Bank auctions too, but I think they suck.

Tires?

S&R has the best deals, but Philippines has great local tire manufacturing - it surprised me too. Many things are not made in the PH, but they make tires.

But the flag shows nonPH, yeah yeah - many of them are made in the PH they just use the brands country incorrectly.

Paperwork Requirements

So, you do need a TIN but anyone can get a TIN. A Tin is a Taxpayers Identification number.

Yes, you can be a foreigner w/o a visa on visa exemption and get a TIN and also a TOURIST ACR if you really want.

Having both actually helps you open an account at any bank as well.

Copy of CR  
Copy of OR
  Notarized Deed of Sale/Transfer, four copies.  
Copy of ID of seller.  
Copy of ID of buyer.
Your TIN/ID card. (TIN/ACR/PASSPORT/USA-FOREIGN DRIVER LICENSE)
MVIR   Insurance - CTPL   

GO To the issuing LTO office, or the central LTO office in QC.
Way easier to go to where the OR/CR was issued, even if it is far.

  PNP HPG Motor Vehicle Clearance - some are attached to LTO, like Pasig branch. MVIR  Insurance - CTPL  

Or just pay a fixer since this all sucks. Show up at an LTO office, and look for the doctor offices, don't pay more than 5k total. I have yet heard of anyone that has not used a fixer. W/ a fixer, you just provide your copies, the police comes to inspect the car, say hi, and that's it. No insurance needed as well.