Sticker Shock!

Used-Car-SaleOne of the biggest price shocks I got was when I decided it was time to stop renting a car and buy one. We came to live in Costa Rica on Feb. 13th 2012. We rented a car for 1 month. I wanted to give myself time to find a good, cheap used car. I thought 1 month more than enough time. Who knew how hard that was going to be! As soon as I opened up my 1st website http://www.crautos.com I like to have fallen on the floor! The prices on these cars were out of this world.

I come from the United States and the minute you drive a car off the lot it depreciates by 50%. So buy a new car for lets say $30K and its only worth $15k if you drive it around the block and go trade it in. I’m looking at this website and saying to myself, “What the hell is wrong with these people. These can’t be the prices of these old cars!” There are cars that are 15 to 20 years old selling for $10 that in the states would only be worth maybe $1500.

The other thing you need to know is that it isn’t illegal to roll back the odometer here. So you can’t trust what the millage is on a car. As an example I finally found a car that I was willing to buy. It was a 2000 Nissan Exterra. The guy wanted $10K for it! I got it for $9500. I can’t pay asking price! That just isn’t going to happen. So before I buy it I have a friend in the US check the vin number to see if anything comes up. Sometimes these cars are brought in from the US. This one just so happened to be a car from the US. It was brought to Costa Rica in 2008. So it was in the US for 8 years with one owner. When it left the use it had 115K mile on it. When I got it it only had 80K miles on it. So it was here for 4 years when I bought it and it lost 35K miles somehow? When asked he had no answer for me. There really is nothing you can do about it, other than don’t buy the car. Sure you can try to get the price down, but most times they just won’t sell it to you as there is someone out there who isn’t going to check and will be willing to pay the price he is asking. I finally say the hell with it and paid the $9500.

Now I bought this from a family member of a mechanic who a friend uses all the time. So it should have been a good deal right? Yea no. Don’t get me wrong it was a good car, but the mechanic told me it was in perfect condition. About a month after I have been driving around in it, it started to stall on me. Now keep in mind I know nothing about cars other than how to get in them and drive them and some people say I don’t even know how to do that well. 🙂 Back to the story. I call the mechanic and he comes over and takes a look at it. Its still runs so he takes it to his brothers shop to hook it up and check some stuff. Very long story cut short I had to have all the belts replaced, the water pump, all the hoses, the breaks, the front shocks, all 4 tires, the abs system, and a couple other things I can’t remember now fixed. This was a car that the mechanic checked over and said its all good.

Here is the thing he wasn’t lying to help if family member sell the car. His version of what is a good car and mine are two different things. I didn’t explain well enough that I wanted a car that would need very little work. It wasn’t that those things didn’t need to be done as he showed me every piece he was replacing and you could clearly see that the hoses were dry rot and the belts had splits and cracks in them and there was water leaking from under the car ect. Its nothing to them to fix up a car so if it need a little work than no big deal. I needed to specify that I wanted to know everything that was going to need to be done to the car in the next few months. Than he would have told me about all this stuff.

Again mind you the parts for this car were not that expensive and the mechanic wasn’t either. So I got all that work done for about $2500 parts and labor. Now with all that said that damn car still stall out when you drive it for the 1st time. I have had 2 mechanics look at it and none of them can seem to fix the issues, so I chalk it up to it being a 14 year old car. It only does it once and the rest of the day it is fine.

So I wanted to wait to buy a new car until I figure out how to drive in Costa Rica. Yes it is a challenge and one I have mastered. 🙂 So after about 7 months of living here I decide it time to look at new cars. I’m thinking again this should be easy and no worries. So again I go to the website and look up new cars. What the hell!!!! Look at these prices! So I have to start investigating what is going on. The duty and the taxes are crazy here. All the cars are imported. So a new car that costs $30k in the states is costing $45k or more here! So I take 3 months looking and searching and doing the research on what is the best make and model to get, as I have leaned some parts are not easy to get here and are more expensive. I also watched to see what cars are on the street and most of them where toyota. I would say 1 out of every 3 cars on the road here are Toyota brands.

After my long journey I decide on a car I am going to buy. I decide it is going to be a Toyota Fortuner. What you haven’t heard of a Fortuner? Well it isn’t sold in the states, but the parts here are very accessible and cost effective. Not to mention it is a diesel and a 4 cylinder turbo charged. It has power and is good on fuel something you need here as fuel is very high, but diesel is cheaper. It take the hills with no problem. It can hold snug to the curves and its a 4 wheel drive so I can go off roading. I have had this car for 4 months now and I love, love, love it.

I paid a pretty penny for it, but it is worth it. I paid more than I would have if I would have bought it from an area that it is available. It was cheaper than importing it. That is the other part of this. Sometimes it is cheaper to import a car yourself than to buy it here. You have to check those numbers once you decide to buy a car. Look for what you want here new or used and once you find it look for it in another country. Once you have found it than contact a broker and find out how much it will cost to bring that car in from whatever country you found it in. Now I would not suggest really buying a used car and importing it unless you go to whevere it is and check it out. I would only do this for a new car. Now compare the prices and do whichever is cheaper. Now it could take a month or more to get the car here, but if you are willing to wait for the car to save the money than go for it. If you are not and the savings isn’t significant enough I just say buy the car here. Don’t go thought he hassle and the wait, but that is up to you.

So do your research and check out everything before you buy be it new or used and make sure you ask the right questions. Oh and I got $2500 off my new car as well. I wasn’t going to pay full price. So have a great day!

Pura Vida!

 

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One thought on “Sticker Shock!

  1. I first have to agree the price on cars here are out outrages, but I thought it might be a good idea to correct some information and explain the reason why some of your information exists .

    First most cars lose about 20% of there value when bought new and driven off the lot in the U.S. Around 10% on average a per year thereafter.

    Taxes are the culprit when looking at cost in Costa Rica there are 3 tax rates in Costa Rica for imported cars. Cars that are new to 3 years old are taxed at 52% of the Black Book average value (they add shipping costs to the value of the vehicle before applying the tax. That shipping cost from Florida is about $400 dollars. A 4-6 year old car is taxed at 63% and anything older is taxed at over 70%. So your 2000 Nissan was taxed at about 73% of the US value plus about $700 for shipping and another about 3.6% for your annual Marchamo (Circulation tax), the license plates and the attorneys fee for registering it in the National registry. All this does not account for any profit for the importer. The lower rates are in place to encourage updating cars on the costa Rican roads

    I would suggest to keep costs down buy the newest car you can.Ideally buy it in southern Florida (buy it from a reputable dealership as many independents sell the junk a lot of used car dealers buy here) and ship it yourself your costs should be no more than $900-$1000 for container shipping and all legal fees, inspection and delivery to you. The Marchamo will be based on the new value of the car including all taxes.

    As you did, always check the Car fax report whether you buy it in Costa Rica or Florida. Many of the cars on the road here were totaled cars bought and shipped here and then repaired from the US, not a valuable car to own. I believe the Costa Rican government finally outlawed the importation of totaled autos for repair.

    The downside of importing a car here is you will lose any remaining warranty benefits, but as Dealers here give about 1/2 of the warranty you get in the US on new cars it really washes in the end.

    My feeling has always been but to buy or bring your car from the US. At least you know what it has been through and while the roads here are certainly better than they were 12 years ago, when I got here, they still can take a toll on a car.

    Hope that is useful for those considering a car.

    Bruce Wood
    Cost Rica Realty One

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