The green license plates, which distinguish corporate and personal use vehicles to limit the private use of tax-benefited corporate cars, were a campaign promise by President Yoon Suk-yeol and have been pursued as a national agenda item since his inauguration. (Yonhap)
SEOUL, Feb. 10 (Korea Bizwire) –In the import car sector, a clever discount strategy is being employed to bypass the green license plates mandated for corporate vehicles valued over 80 million won.
This workaround involves slightly reducing the acquisition cost to fall below the 80 million won threshold, as the green license plate requirement is based on the purchase price.
Given that many popular import cars are priced around the 80 million won mark, some companies have adopted this method to avoid the green plates.
The green license plates, which distinguish corporate and personal use vehicles to limit the private use of tax-benefited corporate cars, were a campaign promise by President Yoon Suk-yeol and have been pursued as a national agenda item since his inauguration.
The Ministry of Land, Infrastructure, and Transport set the 80 million won price criteria based on the listed acquisition cost in the vehicle registration records, which is the price paid by the consumer, not the manufacturer’s suggested retail price.
The introduction of these green plates is aimed at preventing the personal misuse of high-value corporate cars. (Image courtesy of Yonhap)
For instance, a car priced at 82 million won would typically require a green license plate if purchased by a corporation. However, with a 4 million won discount bringing the purchase price down to 78 million won, the vehicle would qualify for a standard white license plate instead.
The policy, which mandates green license plates for corporate vehicles over 80 million won to prevent their private misuse, took effect in January this year. Popular models such as the BMW 5 Series and Mercedes-Benz E-Class often see such discounts.
For example, among the 530i models of the 5 Series, priced over 80 million won, 31.1% of the 7,103 units sold last year were corporate purchases. For the E-Class, 46.2% of E220d and 39% of E350 4MATIC models, both priced above 80 million won, were bought by corporations.
An industry insider noted that while the green license plates might be seen as a status symbol for ultra-luxury cars, they are considered a significant burden for vehicles around the 100 million won range.
Leasing makes it easier to offer custom discounts since it involves a business-to-business transaction between the import car seller and the financial institution before leasing to the consumer.
The Ministry of Land, Infrastructure, and Transport is closely monitoring the situation, recognizing that discount sales could dilute the policy’s intent. A ministry official stated that they are considering improvements to the system if they find a significant number of vehicles avoiding the green license plate requirement.
According to the Korea Automobile Importers & Distributors Association (KAIDA), corporate purchases of import cars dropped over 60% to 4,876 units last month from 12,670 in December, before the green license plate policy was implemented.
The proportion of corporate car purchases also decreased to 37.3% from 46.5% the previous month, a decline of 9.2 percentage points.
Kevin Lee (kevinlee@koreabizwire.com)
