For travelers contemplating a prolonged visit to Costa Rica, the choice between renting a car and purchasing one holds significant weight. While rental services offer immediate convenience and flexibility, buying and later reselling a car locally can emerge as a financially astute move, particularly for those capitalizing on the country's newly introduced 180-day tourist visa. In this comprehensive guide, we'll delve into the intricacies of the car buying and selling process in Costa Rica, equipping travelers with valuable insights and detailed financial analysis to empower them in making a well-informed decision.
Buying a car in Costa Rica:
Legal Requirements:
Residency:
Non-residents can legally purchase a car in Costa Rica, but residency status may affect registration and insurance costs.
Identification:
Bring your passport, proof of address, and a valid driver's license to complete the purchase process.
Vehicle inspection:
Conduct a thorough inspection of the vehicle, preferably with a trusted mechanic, to ensure its condition meets your standards.
Marchamo & Riteve or Dekra:
Make sure that the Marchamo (registration & mandatory liability insurance) and Riteve (vehicle safety inspection) are current. Both stickers should be located on the vehicle's windshield. The Marchamo is paid annually between November 1 and December 31. The month that the Riteve is due coincides with the last number of the license plate. For more on the Riteve or "Dekra" process, check out our post Riteve or Dekra: Vehicle Inspection
Costs and Expenses:
Purchase Price:
Used cars in Costa Rica can vary widely in price depending on factors like age, condition, and model. Expect to spend more on a car in Costa Rica than you would on a used car in the United States because inventory is more limited and cars in Costa Rica hold a bit higher value.
Taxes and Fees:
Expect to pay transfer taxes, registration fees, and potentially import duties if the vehicle was imported.
Insurance:
Comprehensive insurance coverage is recommended to protect against unforeseen accidents or damages. Keeping your Marchamo up to date will give you the legal minimum of liability insurance but will not protect you or your car for additional damages or injury. Local car insurance policies can be purchased from local insurance providers.
Car Shipping to Costa Rica:
Shipping a car to Costa Rica does not seem like a feasible option, primarily due to the hefty import duties involved. When you ship a car to Costa Rica, the government imposes taxes ranging from 50-80% of the vehicle's "retail value." The "retail value" is determined by the Costa Rican government, often exceeding the Kelley Blue Book value by a significant margin. In addition to the steep taxes, the customs process involved in shipping is quite cumbersome. Sometimes vehicles can be held for an extended period in San Jose, requiring numerous trips to the city and additional paperwork to secure its release.
Make sure you do your research: There are a lot of options and the more time you put in, the better your results will be. Here are a few of our favorite local resources for buying a car in Costa Rica:
Financial Analysis:
Long-Term Stay:
Buying a car in Costa Rica is most beneficial for travelers planning an extended stay, typically six months or longer.
Cost Comparison:
If you compare the total cost of purchasing, maintaining, and insuring a car against the expense of long-term car rental, it's likely you will find that buying and reselling a car will be the most cost effective option. Keep in mind that this may be more true for people with a large budget who can buy a car in great condition and sell it in the same condition. If your considering buying and reselling an old or beat up car, it's possible you could encounter a range of repairs during the time you own it, which could be expensive.
Selling a Car in Costa Rica:
Resale Value:
Market Demand:
Research the local market to gauge demand and determine a competitive selling price for your vehicle.
Advertising:
Utilize online platforms, local classifieds, and word-of-mouth to attract potential buyers. Here are a few of our favorite local resources for selling a car in Costa Rica:
Legal Procedures:
Transfer of Ownership:
Ensure all necessary paperwork, including the vehicle's title, registration, and transfer documents, are properly completed.
Vehicle Inspection:
Provide potential buyers with the opportunity to inspect the vehicle and address any concerns they may have.
Marchamo & Riteve or Dekra:
Make sure you sell you car while it is in good legal standing. This means making sure the Marchamo is paid and that the car has had a recent Reteve or Dekra inspection. Having everything "al dia" or in good legal standing will make your sell much smoother.
Financial Considerations:
Depreciation:
Recognize that vehicles in Costa Rica may depreciate more rapidly than in other countries due to factors such as road conditions and climate.
Negotiation:
Be prepared to negotiate the selling price to reach a mutually beneficial agreement with the buyer. If you aren't the best at negotiating, consider reading my favorite book on negotiation: Never Split the Difference
Financial Analysis:
Cost Savings:
Buying and selling a car in Costa Rica can offer significant cost savings compared to long-term car rental, especially for travelers staying for an extended period.
Flexibility:
Ownership provides greater flexibility in terms of travel routes, timing, and customization options compared to rental vehicles.
Resale Value:
While vehicles in Costa Rica may depreciate faster than in some other countries, selling your car before departing can help recoup a portion of your initial investment.
Conclusion
For travelers planning an extended stay in Costa Rica, buying and selling a car locally can be a financially advantageous option compared to long-term car rental. By understanding the legal requirements, costs, and resale considerations involved, travelers can make an informed decision that best suits their needs and budget. Whether opting for ownership or rental, exploring Costa Rica's stunning landscapes and vibrant culture is sure to be an unforgettable experience.
Writers Tips:
Do your research and look for a car that is very commonly found in Costa Rica. The resale value of the car will fluctuate greatly on the ability to find replacement parts for the vehicle. Its always good to look for car brands and makes that are regularly used by rental companies.
Consider visiting a car dealership and letting them know what you are trying to do. Some dealerships will offer to sell you a car and will agree to buy the car back within a period of time at an agreed price.
Frequently Asked Questions
What is Marchamo in Costa Rica?
Marchamo is registration & mandatory liability insurance in Costa Rica. All cars must have an up to date Marchamo sticker on the windshield of the car or somewhere visible on the vehicle. Car's without this sticker can be impounded by traffic police.
What is Reteve or Dekra in Costa Rica?
Can a tourist or foreigner legally purchase a vehicle in Costa Rica?
Is it cheaper to buy a car in Costa Rica?
What is the best car to own in Costa Rica?
Can you finance a car in Costa Rica?
What is the car tax in Costa Rica?
Why are vehicles so expensive in Costa Rica?
Do you need a car if you live in Costa Rica?
Where should i buy a car in Costa Rica?