What Car to Buy and Dealer Procedures

new car dealers procedures

The cars you should consider will vary completely according to your tastes, budget and car usage. In general:

  • Fuel is expensive in Costa Rica, any time you can go diesel or a smaller engine it will pay off in the long run.
  • If you live in a rural area keep in mind the roads, not all new cars have a suspension that will handle gravel and potholes well. Many new cars now feature low profile tires, which will come off more easily in these situations as well.
  • Many dealers have branches outside of San Jose, if you buy in San Jose but are traveling or end up moving to another area it could be to your advantage to know that warranty service is provided in other areas.
  • Unless you plan on keeping the car indefinitely, the popularity of the brand is important.  Vehicles such as Renault or Jeep may be excellent in their home countries and good quality, but here in the local market they are not popular.  If you suddenly need to sell for any reason you will find that the car has depreciated significantly.

Safety Features and Local Market Cars

Keep in mind that not all brands sell the exact same models in all countries. When you are doing your research on-line in English, what you see on a US web page – for example – may not be what you would be buying here. Security features, like ABS brakes and air bags are items that are often left out on cars sold here, in addition to conveniences like power windows or A/C. Emissions and many other items in the structure and components that could affect safety or performance could also be different.

Conversely, sometimes you will find car models that are specifically made for the Costa Rican market. Toyota puts out a “CORaxi” here, marketed to taxi cab drivers here. It features a beefed up suspension and diesel engine not available in the standard Corolla. Suzuki had an IGNIS sedan some years ago that was a ladder style frame (normally used in trucks) and AWD, advertised as only available through the dealer here in Costa Rica.

Bickering at the Dealer

Buying a new car in Costa Rica is a completely different experience than in the US. At many dealerships you almost have to horse collar tackle a salesman to get their attention. You can’t just waltz in and actually test drive a car, you have to make an appointment! Ask for a coffee and they will point you the right direction for the vending machine, you’d better hope you have some coins on you!

Other dealers are more organized and better, but the really big difference is that sales people here will only earn $150 to $200 on most cars, in addition to a very low base salary. While you would think that would maybe motivate them to sell more, to earn more, it often translates to a lackadaisical attitude.

The dealers also don’t sell a high volume compared to counterparts in the US. Fierce competition from used car dealers and the fact that new cars are completely out of reach of the vast majority of Costa Ricans, combined with the small population, make for a small market.

So the dealers seem to be content with selling a certain number of units per year, at a certain percentage of the profit and don’t go in for all the tricks of the trade that you encounter in US dealerships, for example. You will go into the dealership and get a price, generally which would be the price for financing.

Interest rates are high here, so most foreign residents would not go through the grueling process to begin with. But if you did, you would find the dealership works with local banks and will not be able to help you streamline the loan process. Assuming you are paying cash, you might expect to negotiate a discount, but that isn’t the case.

In other words, you won’t find that the dealer seems willing to take a few thousand off the price in order to make a cash sale or to meet an end of the month quota deadline. On the other hand, they won’t come in with surprise fees, extended maintenance contracts, or other gimmicks. The price you are quoted in the beginning is basically the price you will end up paying.

The quoted price will normally included all legal fees and taxes too. But of course you have to be clear on that matter.

Ordering and Payment

If you are here in Costa Rica and want to get a new car, the normal procedure is that you can reserve a car immediately with as little as $1000. You get to pick your color and options, settle on a price and normally will have a car that is located in a customs warehouse. Most dealers will work this way, since they have to pay taxes to get cars out of customs.

The $1000 earnest money payment will give you some time to get your money for the payment in order and make any other preparations. The next step is to provide about 25% of the purchase price to the dealer, which will free the car you reserved from customs and get it to the dealership for preparation. This takes about 2 weeks, but the sales person will give you a date where you can pick up your car.

The date of the delivery you pay the remaining 75%, and sign the paperwork to take ownership of the vehicle once the vehicle has passed your inspection. You will normally get AGV tags at this point, which allow you to drive the car while the real plates come through.

These percentages and procedures could vary at different dealerships and could also be adjustable to suit your preferences. You may wish to pay 100% in advance and pick up your car in one shot with the permanent plates and everything.

New car dealers can take a certified bank check drawn on a Costa Rican bank, cash, a SINPE transfer from a Costa Rican bank, or an international wire transfer.  They can take a personal or certified check from US banks, however they will have to wait 12 business days (or more) while the check clears in order to allow you to take delivery on the vehicle.

Read the related section ( Buying New Vehicles Testimonials ) in order to find out how our clients viewed the process.

Contact us here ( New Car PASS Service ) to get assistance in purchasing a new car at a local dealer.

Read the article ( Should I Buy a New Car ?) to compare the advantages and disadvantages of buying a new car.

Read the article ( What Car to Buy and Dealer Procedures ) to find out how the dealers operate and what characteristics you may look for in a new car.

Published by Russ Martin

Helping expats locate reliable used vehicles since 2006. I have lived in Costa Rica since 1994.

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