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

50 thousand bank note costa rica

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 whom) 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!

Wire transfer

Wiring money costs $35 service fee in the U.S., and the banks here charge $7 to $25 to the account receiving the money, some dealers charge you that fee as well. This is much better for large amounts, like over 10 or 15 thousand dollars. You have to check with your bank before you leave to see what their procedure is, many require a PIN number to be set up personally that you can then use to authorize transfers on the Internet or by telephone. Very few dealers, but some, have US bank accounts that could also be used.

A good choice to import, or it’s too complicated?

You also want to know what information they require regarding the person receiving the money according to the location of the receiving account.  The banks here in Costa Rica have intermediary accounts, so transfers may be made to any account at any local bank.  They may also be into an account that is not US dollars. (see the section on Exchange Rate)

Escrow Account

The escrow account is a good option. Some of our clients that have purchased real estate have already established an escrow account with a local attorney.  We can also recommend a reputable San Jose based escrow company that our clients have been using successfully since 2016, the fees start at around $400 and vary according to the total amount of the escrow account. Quite often if you compare the fee to the expenses incurred while waiting for the SWIFT wire transfer to go through, it’s a similar amount.

Be careful which escrow company you use! Some escrow companies are not accustomed to doing transactions outside of real estate purchases. While they are willing to do escrow for smaller amounts, they aren’t well organized. In the case of our clients, we want to be able to send out whatever authorization is required and have the deposit made in a few minutes.

EV iMiev in San Isidro, Heredia Province

But we’ve had experiences where the client asked for their money and have had to provide additional documentation. This is strange because professional companies normally require all the documentation before accepting any deposit or even opening the account. And inconvenient because in many cases the required document may be in another country, or even something that must be requested from a financial institution — which obviously can result in a delay on completing the purchase and defeats the purpose of opening an escrow account.

Cold Hard Cash

Cash is a possible option. If you are planning on spending around $10,000 and are comfortable with carrying cash, then it’s a good way to go. There isn’t any particular limit on the amount of cash you may bring to Costa Rica. You only need to make a customs declaration at your port of entry and provide documentation about the origin of the funds (normally a withdrawal slip). This isn’t a bad idea if it’s less than $10,000, but it is required to declare financial instruments over $10,000.

If you don’t have a bank account in Costa Rica, or if the account isn’t authorized to receive large amounts of money, then cash will be your only option if you are looking to purchase from a private seller. And even then there are some hurdles you may encounter (we have!) :

  • What currency? Many sellers would be happy to accept US dollars, but quite often they get nervous about taking in counterfeit bills. But at most banks the largest denomination in colones is 20,000. So you need to carry out a shopping bag if you exchange more than a few thousand dollars.
  • Can they deposit that much? Because of ever-tightening money laundering regulations, banks won’t always accept deposits of large amounts, say over a million colones for some clients. The possibility depends on the client’s standing with the bank to some degree and their normal account movements. And also the documentation the buyer can provide as to the source of the funds.
  • Is it dangerous to flash cash to the seller ? This is a big issue. You don’t necessarily want to go around telling people you have the cash on hand to buy the car, but you have to know whether or not they will take dollars or if they are able to deposit the price into their bank account. A lot of people won’t want to take that much money out of the lawyer’s office, and much less keep it at home if they aren’t able to deposit more than a portion at any one time.

Purchase with Credit Card

Life is good if you are a credit card processing company!

Dealers are not able to accept credit cards, because merchant accounts here have 7% fee ! Neither the dealer or most clients are willing to take that kind of a hit. See the debit card section for more specifics.

Debit Card & Cash Advances on Credit Card – good for small amounts

A debit card used to be a very good option that a number of clients used successfully.  For small amounts, under $2000 it works pretty well.  However because of new restrictions intended to counter-act money laundering activities, banks will not perform the service for large amounts unless you also have an account there. You can go to the bank and deposit into any account using a debit card and there is only a small fee. You have the option of taking cash from the bank, or also purchasing a bank manager’s / cashier’s check. A cash advance on the credit card is also feasible, you may fund your credit card by paying in advance and circumvent cash advance limits in some cases.

If it is in the Cirrus or Plus network, that is ideal, bank cards that are not in these networks will normally have problems for this purpose, even though they do work at many ATMs here. At a minimum using a VISA or MASTERCARD is necessary.  The fees vary, your “home” bank will charge a fee, as will the local bank.  Here the charge will be from $1 to $15.

If you think you would use this option, it is imperative that you discuss your intentions with someone knowledgeable at your bank. You ideally would be able to get a direct number to the international or credit / debit card department that you could call in case of problems with the “advance”. You will need to temporarily increase your advance limits on the debit card, normally this only works for a few hours or days, so having a ready way to call your bank and talk directly to the right person is important. It is much better to have the procedure unique to your bank worked out in advance, since it is less than ideal to try to sort through this after a long day of car shopping.

Exchange Rate

The prices of the vehicles are generally stated in colones.  So be aware that the fluctuating exchange rate may come into play. For example, you were quoted a price in colones of 7.5 million and converted that to $15,000 at 500 colones to the dollar for reference. The following day you initiate a wire transfer, which gets into the dealer’s account 2 business days later.  In the meantime, the dollar has dropped 3 “points” to 497.  So the $15,000 you transferred is now worth only 7455000 colones. You will have to make up the difference of 45,000 colones in this case.

Traveler’s Checks – Risky Business Nowadays

This form of payment is not as common as it used to be.  In Costa Rica, and globally, most businesses now accept cards for payment, so visitors don’t need to bring as much cash anymore.  ( younger readers please see article “What’s Cash” — LOL )

However bringing traveler’s checks is a possible option.  The trouble now is that banks are less and less likely to cash them, particularly for amounts over $500.  If you do decide to bring the traveler’s checks as a part of your overall strategy, then probably not more than $3000 would be workable   You pay 1% or so at your bank in the US and pay another 1% at the bank here. There can be a surcharge when taking the money away in $, often 1 colon per dollar. Be careful when cashing checks, you must specify to the cashier that you are getting cash, which is then to be deposited into the dealer’s account. Otherwise the teller may flag it as a direct deposit, which will freeze the funds for 12 to 45 business days and which obviously would delay the transfer of ownership!

If you are looking to purchase a used or new car in Costa Rica, can help you with our PASS service. Click here, used car buying assistance in Costa Rica for details. Click here, New Cars in Costa Rica for information on the peculiar process.

If you would like to see information about other vehicle types and models, click here — Vehicle Makes and Models in Costa Rica — for a list of articles on our site.

Published by Russ Martin

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

2 thoughts on “Paying for a Vehicle if You Don’t Have a Costa Rican Bank Account

    1. Cash is acceptable, depending on the amount of the purchase many people don’t feel comfortable carrying high amounts of cash around.

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