One Big Reason Cars Are So Expensive in Costa Rica

large container ship at dock

It's a good news, bad news story in La Nación today regarding the import duties for new and used cars brought into Costa Rica. The site is in Spanish, but here's my rough translation of the most pertinent part of the story:

"According to the tariffs that have applied until now, new and second-hand cars of no older than three years faced a consumption tax of 30 % , cars four or five years old 40%, and more than six years old 53%.

In the next 10 working days, new and second-hand cars up to six years old will face a consumption tax of 30 % and will have an entire tax load of 53 % while cars seven years and older will see a tarriff of 48%."


The good news is that this is supposed to be a "tax cut" though it probably doesn't feel like such great news for most folks who initially pay the tax, and those who are paying it indirectly in higher car prices. 
old red european car
Anyone know the make and model?

Questions? Well, I have a few that maybe expats here with more expertise in these matters can answer:
  • Is the 53% "entire tax load" really on all cars up to six years old or just new ones?
  • What's in that difference between the basic tariff and the full load (23%)? 13% of it must be sales tax, right?
  • Is there a "full load" figure for the older cars paying the 48% base tariff?
  • Where the heck does all this money go? Let me rephrase that: where is the money supposed to go? I'd wager it's not going into better roads.

9 comments:

  1. Very valid concerns and questions above. If you get a lemon in Costa Rica (we got two), your life could become more expensive than living in your home country quite quickly. Ours almost became our undoing.

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    Replies
    1. We recently had to rebuild the diesel motor in our Mitsubishi, so I know what a big impact repairs can be.

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  2. We know several people who have had trouble with turbo diesels and advised us not to get one.

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    Replies
    1. That's a pretty blanket statement. Turbo diesels are one of the most efficient motors you can get here. Diesel motors are quite efficient even without turbo and last a long time. It was normal wear in our case, nothing to do with the fact that the motor was turbo diesel.

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  3. C.I.F. is included for the "basis" on which taxes are applied here on any imported good. As you must know by now Casey, it is well know that importers are making the big bucks over any other business in our turf ...
    What costs $100 at a reasonable market up north, may cost us up to 185% here regularly. Therefore, bringing low cost CIF cost goods will not damage the final price too much. I am applying that term quite frequently through an exporter representation in Miami from the Costa Rica based company from which I have heard that some Ticos have brought small used yachts and cars, (there are a few now).
    On the turbo diesel and regular diesel vehicles, you are more than correct on your statement. 73

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  4. You wrote in another blog about the fact that electric vehicles were not taxed when imported. I know that there is a bill going through the legislature, but do you know that it passed? Also, you recommended a company that ships cars, could you send that to me?

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    Replies
    1. Lorna, I'm double-checking that exemption. The company I've used for shipping is Lomaser, located in Cartago. You want to talk to Mike Rappaport http://www.lomaser.com/index.html

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    2. Lorna, you are correct. The electric vehicle exemption is not in place yet.

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Thanks so much for your comment! - Casey

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