Buying a car in Saudi Arabia means more than just paying the sticker price. From value-added tax to registration and inspection fees, the cost of owning a vehicle includes a series of recurring charges. For 2025, the Saudi government has laid out clear structures for these fees, making it essential for every driver to understand how much they will actually pay. In this guide, we break down the key taxes and costs associated with car ownership in Saudi Arabia and share practical ways to reduce your expenses.
In Saudi Arabia, value-added tax (VAT) is charged at 15 percent on all new vehicles and dealership-sold used cars. Private sales between individuals are exempt. On top of VAT, registration fees must be paid annually, ranging from 150 to 400 SAR depending on the vehicle class. The periodic inspection fee adds another 150 to 200 SAR, and if the car is imported, customs duties apply as well (typically 5 percent of the vehicle’s value). These charges are automatically calculated when registering through platforms like Absher.
Car license renewal and issuance fees vary depending on engine capacity and cylinder count. For vehicles with engines under 1600 cc, the cost starts at 225 SAR. Cars with engines up to 2000 cc are also commonly priced at 225 to 290 SAR. For higher capacities (over 2000 cc), the fee increases based on model year and value. Classic cars with engines between 2500 and 3000 cc built before 1979 incur a 523.6 SAR fee, while newer models from 1980 onward are charged 673.79 SAR. Larger, more powerful engines mean higher licensing costs.
Started my career in Automotive Journalism in 2015. Even though I'm a pharmacist, hanging around cars all the time has created a passion for the automotive industry since day 1.
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