Getting a Brand New Car in Costa Rica

Blue is meant to denote the eco-friendly aspects of the vehicle

Blue is meant to denote the eco-friendly aspects of the vehicle

Since 2006, we here at WheelsCR.com have helped their clients purchase reliable used cars from reputable dealers in Costa Rica.  If you’re reading this, you probably know that vehicles are a major investment here.  The import duties run from 30% for new cars, to 85% for cars that are more than 6 years old. No vehicles are manufactured here, so transportation and customs brokerage fees are always an additional cost.

Given the high price, the majority of the WheelsCR.com clients settle for older vehicles in the $5000 to $15,000 range. Some clients go for newer SUVs that will cost from $20,000 to $35,000.

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New License Plates Revealed

New Sticker - must match new plates

Yet another sticker for your windshield

Starting in January of 2012, the National Property Registry began using the new license plates for cars being registered in the country for the first time.

The most distinctive feature of the new plates is that they have letters!  Prior to this year, the plates were numbered in consecutive order.  Late in 2011 the numbers were over 900,000, so the question was would the registry move to 7 digit plates, or do something else.

The powers that be decided to go with the new plates and add letters to the mix.  If you know your statistics, you know that a 6 digit passcode made up of only numbers has a possible 1 million combinations.  Whereas a 6 digit passcode, made up of 3 letters and 3 numbers that may be repeated, has a possible 8,000,000 combinations. (only 20 letters may be used – since the registry excluded vowels)

However, the new license plates aren’t just pretty permutations.  They have other new features as well, intended to prevent falsification and “cloning”. Read More

Paying for a Vehicle if You Don’t Have a Costa Rican Bank Account

Sexy, eh?  Could be trouble though ...

Jeep Wrangler Close-up

Many of our clients for the car buying assistance service are in the process of relocating and have not yet established a bank account.  But they would prefer not to wait to buy their vehicle until they get an account.  There are a number of ways to arrange for payment of the auto, but the best one for you may depend on your budget (the amount to be transferred to Costa Rica), and also where (or who) you intend to buy the car from.  For example, currently a wire transfer to the dealer’s account is the best option in most cases.  But if you are buying from a private party or a dealer you’ve just met, then it wouldn’t be wise to wire the money into their account and expect to pick up the car a few days later.  They will probably be in Rio spending your money on wine and loose women!

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Importing a Car to Costa Rica vs. Buying a Vehicle Here

On some web sites people recommend importing a vehicle yourself rather than buying a vehicle that is already in Costa Rica.  A common concern cited is that cars coming in are flood damaged — Katrina Kars — or wrecked vehicles.  But, often the person giving this advice is a customs broker !  To be fair, we also earn money providing a service to people who buy cars here, so if you import a vehicle yourself, then we obviously can’t help you or earn our keep. This article attempts to objectively look at the issue and offer you advice depending on your situation. Read More

Should I use a company to buy the car ?

Two door version Toyota RAV4 1998-1999 models

A lot of people have been told to use an S.A. to buy the car, for the purpose of asset protection. This may or may not be good advice. Some lawyers charge $500 and more to set up the company and there are some disadvantages you will encounter:

  • You will always need an up to date “personería juridica” when you do something with the car (RTV inspection, insure it, pay the annual marchamo – property tax, base insurance)
  • The company has to file a tax return each year in September and pay a stamp in March. This is obligatory, whether or not you have economic activity in the company.
  • The legislative assembly is discussing a tax bill that will charge $200 annually for companies.
  • Being in an S.A. protects the car in case you are sued, but the vehicle is more likely a source of liability (due to accidents) so in most cases the protection is limited.
  • Board members – you need to have different members of the board and a legal representative. This can cause problems later, for example if the lawyer fires his secretary and she is on your board, then you will have to replace her. An unscrupulous or careless attorney can cause you to lose control of the company that will own the vehicle if people are granted powers in the incorporation that they should not have. Ask your attorney about making a Responsibilidad Limitada (partnership or sole proprietor) rather than a Sociedad Anonima (S.A.) to avoid this.
Advantages
Are there advantages to having the company own a car? You may want to have the car in a company name if it will mean you can declare it for local taxes or you are using it for a business. It does protect the vehicle if you are faced with a civil suit for some reason not related to the car, so if it is a very expensive car and this is a consideration, you may want to have it in a company. If you are arrested for some reason having the car in a company name could protect it. If you have an accident with the car, the car could not be placed under a lien as a part of the civil suit arising from the accident. If you do decide to use a company, make sure:
  • The company should not own bank accounts or real estate, only the vehicle. (unless it is a related business enterprise)
  • Consult with your lawyer or CPA about what documents you must file for the company and when.
  • Get a personería jurídica from your lawyer. This can also be obtained when necessary from the service window at the Registro Nacional, it is pretty straightforward process that anyone can do.

Driver’s Education?

Nissan Pathfinder 2000Hi Russ and Kattia!  Sorry for the delay in getting back to you, but we have spent the last two days trying to recover from the ordeal of driving in San Jose!

We had a reasonable journey back to Tilaran and all was going well until we got to our house and Peter discovered that he had left the key for the padlock on the gate on the keyring of the rental car!  Thankfully there is also a side gate where we can bring in the car in off the road, but there were a few moments of panic!  I have called the car rental company and they have found the key – they say they are going to put it on a delivery service which runs on the bus from San Jose to Tilaran.  Hopefully it will arrive on Monday and we can go and collect it from the the bus station.

Anyway, the most important part of this email is to tell you how happy we were to have found you – you have both offered us service with a smile (in Kattia’s case anyway – Russ, we imagined you smiling through your emails!) and have gone above and beyond the call of duty from beginning to end.  You helped us through what could have been a very stressful time and there is no way we could have done it without you.  We were lucky to find a suitable car straight away and you managed to speed us through the buying, registration and insurance processes so that we could get on our way.  Kattia – your cheerfulness and can-do attitude made everything seem easy, even if your driving did leave us holding our breath on occasions!  One day we will learn to drive like you!  Many, many thanks for all you did for us – and please feel free to use our comments as a testimonial on your website – we would have no hesitation in recommending you to anybody.

Regards,
Frances and Peter
:-)

Costa Rica Vehicle Registration – Transfer Process

VW Beetle (new style)

Vehicle registration in Costa Rica goes through the National Registry

In Costa Rica, vehicle registration or transfer done using a lawyer one of 2 ways.  Transfer costs are roughly 3.5 % of the fiscal value of the car according to tables the Registry uses; which may be higher, lower or the same as market value. You can base it on market value to get a rough estimate, this should include lawyer’s fees and all taxes. Read More