Saturday, July 02, 2011

New Car? Pay your Tax man......

Buying a vehicle in Mexico has some advantages and disadvantages. We have have done both.

We have a pickup truck we purchased years ago when we started building the house, we purchased it new in Morelia . I brought down a 95 Tracker, ( little jeep style) which I use for running around the ranch and on errands into town. It's great because I can fit into tiny parking spots where the pickup wouldn't even have a hope. Patzcuaro sometimes exhibits a lack of spaces around the plaza so the Tracker is ideal.

My wife didn't care for driving the pickup or Tracker so about two years ago, we got her a shiny new Honda CRV (When the peso was 14.5 to one) , so my info is from our experience, at least for Michoacan. Not sure how other states work, but here in Michocan this is what we pay in fees. Another reason we got the new Honda is that with the exchange rate, it was a good time to deal with the purchase.

The big tax is called a Tenencia. It is a yearly tax that you pay on cars.

Trucks are considered work tools so the rate is almost nil.

Currently you see a lot of 4 door pickup trucks around because of this tax advantage.
Even though they have the inside room of a large SUV, they pay pickup rates...that would make me consider getting one of those next time we need a pickup. Saving taxes is something always to consider.

Tenencia on a brand new pickup truck will cost you 600 pesos a year, a new Toyota Rav4 will exhume about 7000 pesos, for the privilege of have a nice car.......ergo......Tenencia.

Quite a difference!

For both the pickup and car, the annual registration runs about 300 pesos as long as you get it renewed before becoming late and paying late charges.

In my experience you cannot import a vehicle into Mexico unless it is 10 years old . Or let me clarify that, importing a vehicle less than 10 years old will cost you way too much, and there are several hurdles you will have to maneuver around, to do so. You also may have to "grease" the system in order to have it happen. This was learned from talking to several "car importers" on the border when we tried to import a vehicle before. Once you do import a car, you will still be required to pay a tenencia regardless.

So, importing cars is kind of a pain unless you are a citizen also, especially if the car is older than 10 year of age.

Unless you want to drive around in a US plated car.

If you decide to purchase a brand new car, one thing that is different between the US and Mexico is that the dealers do not haggle or discount their inventory.

I know at least a dozen people that have purchased new vehicles and the only discount was a set of floor mats. I am not sure if this is just here in Michoacan or the rest of the country, so be prepared.


Anonymous said...

We know of people who lease luxury cars in Mexico, but we don't know them well enough to ask about the advantages or disadvantages of doing so nor what it might cost.


JerryL said...

Well that explains why there are so many pickup trucks in Mexico.

judysquiltsandthings said...

The same thing happens in the Kansas. It is cheaper to tag your station wagon, SUV, or van as a 'truck' instead of a 'car'. The property tax is about 1/2. And a lot of folks don't know that including some sheriff deputies!

Felipe said...

You are one useful guy. I did not know that about the vastly reduced tax on pickups. Very interesting.

Tancho said...

Albert, I never actually even considered leasing in Mexico, must only be for companies or real rich folks...especially since usually it is high in interest rates....

Jerry, lots of pickups both new and old....more old...

Judy, you guys are lucky, SUV's get pickup rates, that's a advantage over lots of states..

Felipe, I try to do my public service and be least once in awhile! So now's your chance to get that pickup truck, maybe the restored one from the blacksmith down the street...perhaps?

Calypso said...

Second Felipe's comment. I think I was the instigator of this actually. Been here nearly seven years and I did not know this disparity.

We have one of each - Mex car and U.S. truck - would have been better the other way around apparently.
Gracias senor.

Refried Dreamer said...

we bought a used car and haggled a bit.... but haven't tried our luck on a new one. We've heard the same though. As much as they love to "regatear".... cars apparently aren't included. :(