Buying a Car in Hong Kong

Information on the paperwork and process involved, whether buying a car from a dealership or a secondhand car through a classified advertisement...

Due to pollution and climate change, private car ownership is largely discouraged by the government and motoring costs reflect the government's policy. When buying a new car, a first-time registration tax has to be paid based on the size and value of the car. The Hong Kong motorist is faced with a shortage of parking spaces, high traffic density, high fuel costs and an annual or four-monthly vehicle licence fee. Hong Kong's heat and humidity make for a harsh environment for cars, so regular maintenance is essential. However, buying a car in Hong Kong is relatively straightforward. All cars must be right-hand drive, except in rare circumstances involving cross-border work, as road users drive on the left. Note: Buyers must be over 18.

Buying a New or Used Car

There are dealerships for new cars throughout Hong Kong. Alternatively, there is a high turnover in the second-hand market with new cars devaluing relatively quickly. Cars are often advertised by people leaving Hong Kong, and such adverts may be found on websites like Adpost or in newspapers, and on notice boards in public places.

Checking a Used Car Before Purchase

It is advisable to see the car's service history to help validate the stated mileage. It is also advisable to get the car checked by an independent source to ensure that it is in good running order and has no major problems. The Hong Kong Automobile Association will check a second-hand car if requested.

Certificate of Clearance

Anyone planning to buy a second hand vehicle should apply to the Licensing Office for the relevant Certificate of Clearance before going through with the transaction. This certificate, which is free, is valid for 72 hours and certifies that the car is free of outstanding penalties and not subject to any licensing suspension.

Insurance

It is necessary to have at least third-party insurance cover by law, but other packages such as comprehensive cover are also available.  Failure to purchase a compulsory third-party policy will result in large fines, up to 12 months in prison, and one to three year driving ban.

Notice of Transfer

Both the buyer and seller must sign the Transport Department's Notice of Transfer of Ownership of a Vehicle form within 72 hours of a change of ownership. The form details transaction fees and fines for non-compliance. The Notice of Transfer form can also be obtained from any Transport Department Licensing Office, Post Office, Home Affairs Public Enquiry Service Centre or from the Fax-on-demand Service with the Transport Department Customer Service Hotline. The new owner should keep the original form and give a duplicate to the former owner. The Notice of Transfer form must be submitted to a Licensing Office in person by the buyer within 72 hours of the transaction along with the following:
  • Vehicle Registration Document (the original document signed by the registered owner)
  • Proof of identity (passport or HK Identity Card)
  • Proof of insurance (an insurance cover note)
  • The appropriate fee
The seller must likewise submit the duplicate copy of the original form to a Licensing Office.  The Transport Department suggests that the process be completed at the Licencing Office by both parties at the same time, to avoid potential complications arising from unpaid fees. Licensing Offices are located at:
  • Hong Kong Licensing Office At: 3/F, United Centre, 95 Queensway, Hong Kong
  • Kowloon Licensing Office At: 2/F, Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road, Kowloon
  • Licensing Office At: 5/F, Kowloon East Government Office, 12 Lei Yue Mun Road, Kowloon
  • Sha Tin Licensing Office At: 2/F, Sha Tin Government Offices, 1 Sheung Wo Che Road, Sha Tin, New Territories
Submission of the notice does NOT mean that the transfer of ownership of a vehicle has been approved. The effective date of transfer of ownership will be specified on the new vehicle registration document issued to the new registered owner. The previous owner should only hand over the vehicle registration document to the new owner when the Transport Department has registered the transfer. The application will not be accepted if there are any amendments that have not been endorsed by the new owner and the registered (old) owner. Any outstanding First Registration Tax, Registration and Licence Fees on a particular vehicle will be charged on transfer of ownership of that vehicle, unless remission is granted, to the seller upon their completion of for TD468. Vehicles registered on or after 1 August 1994 cannot be sold at a price greater than the taxable value, the value of tax-exempt accessories, the value of the unexpired portion of tax exempt warranty, plus the first registration tax paid.

An Alternative to Buying A Car

Car leasing is equivalent to a full-service car rental on a long-term basis. The leasing company takes care of the licensing, insurance and maintenance, ensuring that the car is operating in good order at all times. The motorist only needs to look after the monthly rental payments and the cost of petrol and parking. In general, to lease a car, the person must be over 25 and have had a driving licence for at least two years.

Further Information