How 15% VAT applies to new and used cars

Every new car sold by a dealer in Saudi Arabia carries 15% VAT on the full price. Always confirm whether an advertised price is inclusive of VAT before you compare offers — the difference on a SAR 100,000 car is SAR 15,000.

For used cars, the rules changed in July 2023. Licensed dealers can now apply VAT only on their profit margin instead of the whole price, but only for "eligible used cars" that were previously registered and used inside the Kingdom. The scheme is optional, so two showrooms may price the same car very differently.

If you buy directly from another individual, no VAT applies at all, because a private seller is not a taxable person. That is one reason person-to-person deals through Absher's vehicle sale service are often cheaper than showroom prices for the same car.

Official source