“Finland now has legislation for refunding the registration fees on cars that are taken out of the country.”

Hi, could you tell how it works in practice? Does the law make it lucrative to export old (and cheap) cars to Russia or elsewhere?

Car taxes is just the start, do what India did.

“In the 1990s India started liberalizing its economy,” says Dalmia, “and it did three things: cut taxes, liberalized trade, and deregulated business.”

and it worked…………

India is buying/building 3 Aircraft Carriers and will be a true blue water Navy by 1015. Now thats progress.

Buy a SAAB,a fine ameriKKKan automobile!

The economic reason for taxing cars are external costs — costs that the outsiders have to bear. Cars cause pollution and congestion, and they produce car accident victims, that require public funds in the hospital. Cars also have a dynamic relationship vs. public transport: favoring one system is away from the other.

Public transport, especially rail, has large scale economies (as operation volume grows, unit cost decreases) whereas cars have practically no scale economies. So taxing cars and subsidizing public transportation can be welfare enhancing.

Cars are also a factor of production (and effectuate consumption). Modern just-in-time production would not be possible without cars. And if we would stay away from JOT-production when the rest of the world has adopted it, we would lose some productive activities to other places on earth.

Therefore, cars should not be taxed simply on the basis of “cars are bad and the more taxes the better” or “cars are a good tax source for the government, so let’s tax them some more”. (The two most repeated reasons for car taxes in public discussions).

We should tax cars, but I’m afraid that at this moment we are well above the optimal tax level. At the current level we most likely prevent some welfare enhancing activities from realizing, because they would require cheaper mobility to realize.

If the taxes were closer to reasonable, this fear of private export of used cars and requirements for tax refunds would not be even a potential issue. That said, Iceland’s story sounds like a very postmodern fairy tale. Some time ago there were stories of Icelandic car owners offering their cars with some cash to anyone who would take the car and the loan payments off their hands. I guess they didn’t find any such person on the island.

Don’t stop with just one tax, you have to get them ALL reduced.

Svenska Aeroplan AB

Finland has ridiculously high taxes on cars and everything else. I don’t think it’s very helpful. You can’t even say that public transit is a good value in Finland – it’s way overpriced. Maybe it’s time to rethink.

finally, there is some trace of a brain in your head. good post.

Cars are one of the illnesses of our world. Taxation is an excuse; banning is the cure.

So lets all go Horse and Buggy?

right?????

Yep, we could all go horse and buggy, and the rich could drive horse-shit-methane powered cars. Sounds really good.

A guide for driving in Finland for the cost oriented.

1) To avoid the high car tax, buy the cheapest 15+ years old death trap you can find. Remember to check that it has been inspected recently. This is important, you can only drive until the next yearly inspection is due.

2) When the piece shit dies on you, just abandon it on the road side and set it on fire. This adds a nice effect and keeps you warm while waiting for a friend to pick you up. Remember to take a photo of the car with your cell phone and email it your elected member of parliament with a tank you note.

3) Repeat from step 1.

Disclaimer: Due to high fuel tax and tax on owning a car, you will still pay through the nose for driving in Finland. But this is the most economical way, tested by millions of Finns during several decades.

@12 LOL That is so true. I have seen that so many times. Our neighbourhood is one of those places where the cars get abandoned. Only once, though, have I seen one burnt.

Finland is too small and sparsely populated for effective public transport in most cases. For this reason, car taxes should be immediately abandoned. We have Keskusta in the government and still the #1 problem why living in the countryside is difficult is not addressed.

I am not eagerly looking forward to getting a car, in fact I’m scared that I’ll have to buy one, just because it’s going to be a money dump. 300% overprice on gasoline, 100% overprice on the car itself, etc. fun…

Sepisp, follow the instructions @12.
Many of the last 5-10 cars I have owned, I was the last owner. One went to Africa, 4 went to the junkyard, a couple were given away, etc. Now I have a 93 Nissan Sunny. My wife drives a 91 Subaru. You can get good drivable cars for about 1000-2000. You may have to put in a few hundred here and there in service, but that doesn’t come close to the value that is lost on a brand-new car in the first years, coupled together with its fake, highly taxed value in Finland.

The only thing worse than an uneducated , brainwashed person, is an educated ,brainwashed person!! See, they both firmly beleive in the propaganda they have been fed, but the educated brainwashed person beleives that he can actually justify , and defend that propaganda.

FINNS FALL INTO THE LATTER GROUP!

I am tired of Finns always trying to justify the exorbitant prices that they pay for basic commodities here. Their favourite line of argument always is ” but our salaries are higher than in the other countries. Our salaries are higher than in the US, so our goods have to be more expensive too!” BULLSHIT!!

I always tell them to forget about whose salary is higher. What we have to look at, is the percentage of one’s salary used for the purchase of basic commodities. Example, A Finn works for 3000€ a month, and an American works for 2000$ a month.If the Finn spends 1400€ a month on his basic needs, and the American spends 800, guess who spends a greater percentage of their salary on acquiring their basic needs; the Finn. Case closed!!

i’m not so angry about taxes on cars! i’m more pissed off about tax like fee called traffic insurance (liikennevakuutus).

it feels like a tax and it’s always same regardless how much one drives.

Hi. Your blog is funny I’m finnish but I spent a year in USA and now I’m back. I wanted to comment on one of your writings where you wrote about finnish people not wanting to talk finnish with you. Trust me, it’s not about they thinking you speak poor finnish. I mean, I haven’t met anybody who says they don’t want to speak finnish with someone who speaks it badly. This is why most of us switch the language to english: We live here, far away from everything. And there is really not so many chances to talk english or any other foreign language to anyone. So when we get a chance, we’ll use it. Finnish people think it’s “cool” for once, to use the language that we all have been learning in school for real. So it’s not really about your finnishlanguge, it’s about you being american and finnish people wanting to speak that.

Hi

Please tell us good things about Finland
And why are you living in Finland?
Regards
Riku

I completely agree with the article. The far too high level of taxation on cars in Finland is just appalling.
The money that is currently spent in Autovero is just useless.
If the autovero tax was abolished or lowered, the money saved by the Finns would serve to the 3 following purposes.
A percentage of it will be saved in bank making the whole country economic situation more stable due to an higher amount of personal savings.
A part of the money will be spent in shopping and will immediately enter the circle of economy.
Another percentage will be invested making Finland and the Finns better of with more money available and more money running into the economy hence in the pockets of all the Finns.
Thanks to the autovero and the Finnish government this is not happening already.

wow…
tats great n cool….
Smart Car Care
*******
Justin