Buying or Importing a Car in Costa Rica - Do Your Homework!

---

Many argue there is no need to have a car in Costa Rica. Valid points to support this view are: automobiles in Costa Rica are substantially more expensive than in the U.S. mainly due to high import fees, gas is more expensive (currently at $4.50/gallon), driving in Costa Rica makes NASCAR look like a gentleman's sport and public transportation such as buses and taxis are widely available and inexpensive.

When I first made my decision to move to Costa Rica, I thought I could live without a car - even though I have had my own transportation since I was 16 years old. For my first two months in Costa Rica I relied on buses and taxis and did enjoy the cheap transportation.

* Bus rides up and down the mountain between my home and the nearest town of Coronado are ¢155,00 colónes ($00.31) and taxi rides for the same trip are ¢1.700,00 colónes ($3.43).
* A bus from Coronado to and from downtown San José is ¢210,00 colónes ($00.42) but a taxi ride between downtown San Jose to my Las Nubes home could run as much as ¢6.000,00 colónes ($12.12) due to the distance and time in traffic.

Although buses are the least expensive way to get around, they have their limits when shopping for groceries and other larger items. To save money, I would try to take a bus to the store ... then if my purchases were too cumbersome for the bus, I would take a taxi back home. Costa Rica taxi drivers are generally very accommodating when it comes to riders and their multiple packages.

But being "green" was not in my future due in-part to my location up in the mountains of Las Nubes de Coronado. If time is money, I did spend allot of it waiting for the buses - and taxis do not sit and wait on the mountainsides for the occasional rider. So Costa Rica car shopping was now a priority.

Two options to having a vehicle in Costa Rica are Importing and Buying - each having its own advantages and disadvantages.

1. Importing an Automobile into Costa Rica
* If you want to bring your own vehicle into Costa Rica because you are comfortable with its history, mechanical condition, etc. ... you can drive or ship an automobile into Costa Rica. But be advised, the vehicle should be without any liens, and;
* By law, you must register the vehicle prior to it being in Costa Rica 90 days, and;
* Registering a vehicle previously registered in another country will require emissions testing, legal documents, and;
* Import taxes on cars, trucks, SUVs or any type of automobile range from 45%-85% of the vehicles Blue Book value based on an equation that takes into account the vehicles age (ie: vehicles 4 years or less = less tax percentage vs. higher value, older vehicles = higher tax percentage vs. lower value).
o Example: a two year old $15,000 Blue Book value vehicle could cost about $6,750.00 in import taxes!

2. Buying an Automobile in Costa Rica
* The automobile you buy in Costa Rica can be 30%-70% higher in cost than the same vehicle purchased in the U.S. ...
* However, generally speaking you save money vs. the cost of importing when you factor in the expenses of driving/shipping, legal fees/documents, import taxes, etc.

Full disclosure: I have never owned a new car in my life ... so I am certainly biased toward buying used vehicles. As a mortgage professional, too often I would deal with clients driving very expensive automobiles with huge payments while owing more than the car was worth (aka: being upside-down on their loans). When it comes to automobiles, I prefer to let others take the hit - let them have the new car smell and the instant depreciation that goes with it. I buy my vehicles at a fair price, in good condition and keep them running for many, many more years of service. It just makes good financial sense. Especially in the Costa Rica driving environment where the last thing I want to worry about is somebody scratching my brand new car as they weave by me in traffic!


Se Vende
Every vehicle is 'For Sale' or "Se Vende" (pronounced: say-ben-day) in Costa Rica - or at least it seems that way with so many cars having some type of signage denoting their availability. A great Costa Rica web site for researching popular automobile models, market prices and buying or selling vehicles is www.CRAutos.com. There are also many, many new and used car dealerships in Costa Rica with a large number of the used automobiles coming directly from the United States. In fact, some used car dealers even try to sell the vehicles before they are out of customs at an advertised price much lower than fully imported vehicles - meaning you pay the dealer a certain price and then to get your car you must additionally pay the vehicle's owed import taxes and title fees (ie: Mitsubishi Montero, $11,000 to dealer + $4,800 to customs). So be sure you understand how the advertised price is being figured before getting too excited!

With no shortage of available cars in Costa Rica, the trick is finding a good car at a fair price. This can be a difficult proposal when you are in a new country. Not only do you not speak the language, but you don't have many of the resources you may have been used to such as; a trusted mechanic, a working knowledge of the motor vehicle laws, etc., etc..

For these reasons, I personally did not feel comfortable in shopping for a car and going though the process on my own ... so I enlisted the services of Dr. Roy Nicholas (506-8381-1816, www.CostaRicaProblemSolvers.com, [e-mail]). I met Nick through a mutual friend that lives in Costa Rica and found him to be quite helpful. Nick is a native U.S. citizen that spent time in Panama before moving to Costa Rica some 20 years ago. He is fluent in both English and Spanish and knows the Costa Rica government and social systems extremely well. Nick personally assisted me through the entire process of looking at vehicles, researching vehicle titles and liens, getting price quotes on post-purchase mechanical and security items, etc., etc. Thank you for all your help Nick!


How and What I Bought
In addition to never having bought a new car in my life, I have only purchased one used car from an actual dealership. The reasons were simple; I always found better car deals when buying direct from private sellers, I had the peace of mind in knowing my own trusted mechanic would give me an honest pre-purchase assessment and I knew the U.S. car buying process.

Costa Rica proved to be different in that I was never comfortable dealing with private sellers for various reasons. My not speaking the language was part of the problem but the Costa Rica car selling culture of not admitting to any past or present mechanical problems regardless of age didn't give me the confidence needed to move forward with a private purchase. Even the Costa Rica government doesn't keep track of vehicle mileage because so many speedometers are disconnected due to the fact that they just 'broke a couple months ago'!

Trusted Costa Rica accountant Joaquin Granados (www.GranadosCPA.com) suggested that shopping reputable auto dealerships would be the better way to purchase a used car in Costa Rica. With no noticeable difference in price compared to the private sellers, I followed Mr. Granados' direction and visited the VETRASA (www.SuzukiCostaRica.com) dealership in La Uruca (pronounced: oo-roo-ka), Northwest of downtown San José visible from the highway leading to Juan Santamaria International Airport.

The VETRASA used car division did not have an English speaking sales person so they quickly brought over new car sales representative Melissa Vargas (8871-3727, [e-mail]). Melissa is a native Costarricense that had just returned from living 7 years in the Atlanta, Georgia area. Melissa's English was excellent and her customer service via phone calls and prompt e-mails was truly appreciated. Melissa worked in conjunction with VETRASA's used car and Spanish speaking representative Jackeline Quiros (8828-5184, [e-mail]) to complete the sale.

I ended up buying a 1997 Mazda 323F for $6,400.00* from VETRASA motors. The vehicle is in good condition with 157,000 kilometers (97,500 miles), automatic transmission with gear "HOLD" feature for mountain driving, highly functional air conditioning, car alarm, nice AM/FM/CD stereo with detachable face place, etc. The negotiated price included all applicable costs such as sales tax, document preparation, transfer fees, etc. VETRASA also agreed to do a complete inspection and tune-up on the car including transmission fluid replacement, etc. The mechanical work completed showed VETRASA ended-up replacing an engine mount during this process along with some other work at a total retail service cost of just under $500.00. Of course there was no additional cost to me as this service was included in the purchase price.

In buying the car through a dealership I also received a 30 day limited guarantee covering the engine and drive-train along with a freshly detailed car that was ready for my final inspection as agreed. I certainly recommend VETRASA and its sales team of Melissa Vargas and Jackeline Quiros for your Costa Rica car buying experience.


Steps to Buying a Car in Costa Rica

1. Find a car
* In Costa Rica, the vehicles with the highest resale value due in part to their reliability, inexpensive repairs and availability of replacement parts are the most common Japanese makes as well as a few others (ie: Honda, Nissan, Toyota, Mitsubishi, Suzuki, Geo, Hyundai, etc.)

2. Check the vehicle's required Mechanical & Emissions information.
* On the windshield there should be two mandatory Costa Rica stickers:
1. Revisión Técnica Vehicular (issued by the RTV and Ministro Obras Públicas y Transportes or MOPT).
2. Placa (issued by Instituto Nacional de Seguros or INS and Consejo de Seguridad Vial or COSEVI).
* In the car or with the owner should be the corresponding documentation.
1. Tarjeta de Revisión Técnica - this is the last annual inspection report that will list any noted mechanical defects along with the vehicles emissions test results that could indicate engine problems.
2. Placa document showing applicable annual registration fee or Marchamo has been paid.

3. Negotiate a sales price contingent upon clear transfer of title, mechanical inspection, etc.
* Recognize that sales tax, legal documents and transfer fees will be required to be paid in addition to the actual purchase price - so negotiate accordingly.

4. Complete a vehicle title search to check for registered owner information and liens.
* You want to ensure the person you are dealing with can sell you the car and know what liens will need to be released at sale.
* Title searches can be done online at www.RegistroNacional.go.cr by going to the Consulta de Vehiculos or "Muebles" section.

5. Complete a vehicle license plate search to check for outstanding fines.
* In Costa Rica the vehicle's license plate is its identification. Any parking or traffic fines are attached to the plate - if you buy the car, you buy the outstanding fines if they are not paid prior to taking possession of the vehicle.
* Plate or Placa searches can be done online at www.RegistroNacional.go.cr by going to the Consulta de Vehiculos or "Muebles" section.

6. Have the car inspected by a trusted/referred mechanic -or- dealership service department complete with a list of items inspected, serviced and repaired.

7. Get Supplementary Auto Insurance
* Any Costa Rica vehicle with valid plates comes with a very basic amount of insurance coverage which is not sufficient;
* Supplementary Auto Insurance is offered only through Costa Rica's Instituto Nacional de Seguros or INS. This insurance can be acquired by any resident or non-resident that is legally in Costa Rica.
* English speaking providers of INS automobile insurance include the Association of Residents of Costa Rica or ARCR (506-2222-1722, [e-mail]) and Garrett & Associates (506-2233-2455, [e-mail]).
* For more information on Costa Rica Automobile as well as Health, Property and other Insurances - see the CostaRicaBlogger.com post titled: Costa Rica Insurance (coming soon).

8. Bring a Costa Rica bank issued cashier's check or "Cheque de Gerencia" for the amount due at delivery.

9. Review Prepared Legal Documents - documents such as the Protocolo, Derecho de Circulation and Escritura will need to be drawn up by an attorney in order for the vehicle to be registered in your name, release any recorded liens, etc.
* Make sure the name of the seller in these documents matches exactly the name that appeared on title during the title search.
* Make sure your name and other information in these documents is correct.

10. Take possession of the car - ensuring you get the following documentation:
* Sales receipt with a description of the vehicle including: Price Paid (Prima), Make (Estilo), Model (Modelo), Year (Ano), Color, Motor No., VIN (Chasis No.) and Plate No. (Placa No.).
* Legal documentation copies - originals will need to be filed so that vehicle can be transferred into your name (takes approximately one month).
* 30 Day Limited Guarantee if purchased from a dealership

Documentation to Keep In the Car

1. Tarjeta de Revisión Técnica issued by RTV/MOPT showing vehicle inspection results.
2. Placa document issued by INS/COSEVI showing applicable annual registration fee or Marchamo has been paid.
3. Proof of INS Supplementary Insurance.
4. Sales Receipt (until all registry documentation has the car in your name, which can take a month)



I hope this information proves helpful in making your decision as to whether you will want to own a car in Costa Rica along with the ever important topic of Importing a vehicle into Costa Rica vs. Buying an existing Costa Rica vehicle. The Costa Rica automobile ownership process can seem a bit overwhelming at first only because it is different - but with the right attitude and homework it is really not all that complicated.

Additional related topics including; Driving in Costa Rica, Costa Rica Car Security, How to Get a Costa Rica Drivers License, How to Navigate Costa Rica and Costa Rica Gas Prices are all available at: www.CostaRicaBlogger.com

---