Costs of Owning a Car in Brazil
Cars in Brazil have one of the highest tax burdens in the world and the cost of having a car is equally as high. In this article we will have a look at some of the costs related to keeping a car in Brazil.
Prices of New Cars
Even though Brazil currently ranks in 8th position among the largest car manufacturers in the world according to OICA, short for Organisation Internationale des Constructeurs d'Automobiles, Brazilians still pay a high price for the cars in comparison to countries like the USA, Argentina, France and Japan.
Specialists estimate that the markup for Brazilian carmakers is at least twice what is practiced abroad and this could be the result of poor competition. For each car sold in Brazil, the carmaker profits 10%, while in the USA the percentage is 3%, according to Sindipeças, the National Sindicate for Industry of Automotive vehicle parts.
The small hatchback cars are still the most popular in Brazil due to their relatively low prices. For reference on prices of new cars and the most popular models in Brazil, check the article “The 30 Best-Selling Car Models In Brazil”.
Taxes
According to IHS Automotive Consulting, 32% of the costs of a new car are directly related to taxes. However, the tax that most concerns car owners is the IPVA which is due annually.
IPVA is charged on the ownership of any automobile vehicle. The value is calculated according to the vehicle profile and its state of origin. For the state of São Paulo, the rates in 2014 were:
| Type of vehicle | Rates |
| Trucks | 1.5% |
| Buses, minibuses, cab trucks, motorcycles, mopeds, scooters, tricycles, quadricycles, earth moving machinery, forklifts, cranes, locomotives, tractors and similar | 2% |
| Vehicles using ethanol, natural gas or electricity | 3% |
| Any other motor vehicle that is not included in the categories specified above | 4% |
The rates applied according to the table published by the State Treasury Office, known as Secretaria da Fazenda, are based on the average market price for cars of similar models and characteristics.
A discount is offered if the IPVA is paid in only one installment in January, but it is also possible to pay it in three monthly installments. Old or vintage cars, which are those older than 20 years are exempt from the payment of the IPVA.
Insurance and Licensing
In addition to the IPVA, there are other mandatory expenses directly related to owning a car. These are the DPVAT, CNG and Licensing.
DPVAT
Short for Seguro de Danos Pessoais Causados por Veículos Automotores de Via Terrestre this is an insurance for personal damage caused by automobiles, which guarantees that the victims of accidents caused by an automobile receive an indemnification.
The indemnification goes from BRL 2.700,00 to cover medical expenses to BRL 13 500.00 in case of death or permanent disability. The DPVAT is paid along with IPVA and has a fixed value of BRL 105.65 for cars, BRL 292.01 for motorcycles if paid in one installment, BRL 396.49 for buses and BRL 110.38 for trucks. The value is the same for locally produced and imported cars.
GNV Stamp
Used by more than one million vehicles in Brazil, compressed natural gas or CNG equipped cars must go through an annual inspection carried out by shops accredited by Inmetro. The average cost of the inspection is of BRL 260.00.
Licensing
Every year cars are required to renew their CRLV, short for Certificado de Registro e Licenciamento do Veículo, which is the vehicle licensing and registration certificate. This document is mandatory and the fee is BRL 72.25. Also, all the fines you might have received over the yearly period must be paid in order to get your vehicle licensed.
Regular Insurance
Car insurance varies a lot according to the owner’s age, how the car is going to be used, how many people will drive it and, of course, according to the car itself. Insurance in Brazil is quite expensive and therefore many people do not have it. The insurance often varies between 3 to 10% of the total car price per year.
Devaluation of the car
Once the car has left the dealership, it suffers devaluation that ranges from 10% to 30% in the first year alone.
Applying this logic, those who buy a brand new economic car, do not have to worry too much about the devaluation that probably will not surpass 15% in the first year. Those who are interested in more “luxurious” cars should opt for a pre-owned version with only one year of use as they tend to devalue by 20%.
According to research made by Agência AutoInforme in 2014, Chevrolet Onix is the least devalued car, with a rate of 8,5% per year, while the Hyundai Azera has suffered the greatest devaluation, reaching 23.8%.
Fuel
Taxation on gasoline in Brazil corresponds to 53% of the litre price. Here is a list of the minimum and maximum prices for a litre of gasoline in major Brazilian cities, obtained through the page Preço dos Combustíveis in August 2015:
- São Paulo, SP: from BRL 2.80 to BRL 3.40
- Campinas, SP: from BRL 2.80 to BRL 3.45
- Ribeirão Preto, SP: from BRL 2.90 to BRL 3.30
- Rio de Janeiro, RJ: from BRL 3.24 to BRL 3.80
- Niterói, RJ: from BRL 3.20 to BRL 3.80
- Porto Alegre, RS: from BRL 3.00 to BRL 3.82
- Curitiba, PR: from BRL 2.90 to BRL 3.40
- Belo Horizonte, MG: from BRL 3.07 to BRL 3.60
- Recife, PE: from BRL 2.90 to BRL 3.60
- Brasília, DF: from BRL 3.53 to BRL 3.54
- Salvador, BA: from BRL 3.18 to BRL 3.99
- Natal, RN: from BRL 3.15 to BRL 3.38
- Manaus, AM: from BRL3.38 to BRL 3.59
- Belém, PA: from BRL 3.25 to BRL3.49
- Vitória, ES: from BRL 3.19 to BRL 3.61
For ethanol the prices are:
- São Paulo, SP: from BRL 1.70 to BRL 2.20
- Campinas, SP: from BRL 1,60 to BRL 2.30
- Ribeirão Preto, SP: from BRL 1.48 to BRL 2.17
- Rio de Janeiro, RJ: from BRL 2.30 to BRL 3.00
- Niterói, RJ: from BRL 2.25 to BRL 3.00
- Porto Alegre, RS: from BRL 2.29 to BRL 2.92
- Curitiba, PR: from BRL 1.88 to BRL 2.40
- Belo Horizonte, MG: from BRL 1.86 to BRL 2.50
- Recife, PE: from BRL 2.00 to BRL 2.70
- Brasília, DF: from BRL 2.72 to BRL 2.74
- Salvador, BA: from BRL 1.50 to BRL 2.70
- Natal, RN: from BRL 2.46 to BRL 2.87
- Manaus, AM: from BRL 2.39 to BRL 2.93
- Belém, PA: from BRL 2.30 to BRL 3.00
- Vitória, ES: from BRL 2.39 to BRL 2.89
Parking fees
Parking your car on the streets is not an option in major Brazilian cities. Parking spots are scarce and the ones available may be in a dangerous area. The safest option is to leave your car in a private parking lot, however, it can be expensive.
Just to give an idea, parking your car in the Avenida Paulista area, in São Paulo, can cost you BRL 15 per hour. If you manage to find a garage in the area that will offer you a fixed parking spot you may have to spend between BRL 350 and 450 per month.
Parking on the street can be charged as well. There is a system called Zona Azul (blue zone), which corresponds to the demarcation of an area where parking will be charged, even though your car is left on the street. The price is BRL 5 per hour and there is a limit of 2 hours per car in the determined spot. If you fail to fill the Zona Azul cards or to display it on the dashboard, a fine will be charged. There are several traffic officers that keep a close eye in these areas.
Toll-road fees
According to research institute Ipea, the national average for the toll-road fees is of BRL 7.6 per 100 kilometers.
The most expensive states are Rio de Janeiro, with prices that can reach BRL 20.49 per 100km and São Paulo, with BRL 14.64 per 100 km.