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Wednesday, September 17 2014 @ 07:35 PM EDT

Should I Bring My Car to Panama or Buy Something There?

Cars & Transportation By DON WINNER for Panama-Guide.com - People who are moving to Panama, particularly from the United States, often come up on the Americans in Panama Yahoo email group and ask "should I bring my car with me to Panama or should I sell it here and buy something there?" Many people, and I mean thousands of people, have already faced this same decision. And, the great majority have figured it out - it makes much more sense to sell whatever vehicles you own in the United States, "ship" the money in your back pocket when you fly down, and then buy something here, new or used, once you arrive. There are all kinds of good reasons for doing it this way. Here are a few;
  • Example Vehicle: Let's say you're driving a 2002 Chevy Suburban 1500 4x4 SUV with an 8 cylinder engine and about 65,000 miles in pretty good condition. That car has a Kelly Blue Book value of about $10,000 dollars. And, let's say you live in Wisconsin and you're going to retire and move to Panama. I will be using this vehicle for the example, but the same principles apply to practically all.

  • Shipping Cost: First things first. You will have to make arrangements to have your car shipped from Wisconsin to Panama on a boat. Of course there are companies who do this and it's not cheap. I don't know what the exact cost would be to ship this vehicle from point to point, but it's probably in the neighborhood of $2,000 dollars or so.

  • Import Taxes: When you car gets to Panama you will have to pay 18% importation duty plus another 7% ITBMS, based on the value of the vehicle. So there's another $1,800 in duty and $700 in ITBMS. You're already up to $4,500 dollars in combined shipping, import taxes, and sales tax - which is practically 50% of the value of the vehicle.

  • Bribes At The Dock: You're going to end up paying bribes and fees one way or the other to get your vehicle into Panama. There is a "customs agent" - the guy who runs your paperwork through the system and gets all of the right stamps. At the docks those government officials are under no pressure to move your paperwork quickly, so if you want to see your vehicle any time this century they are standing around with their hands out, waiting for a bribe to "hurry things up." You don't have to pay these little $20 and $40 bribes, but if you don't you can expect you car to come off of the lot dead last. So, at this step you can add a few hundred more dollars in fees and bribes.

  • Bug Spray To Screw Up Your Paint Job: Somebody just posted this morning that their car was sprayed at the docks, supposedly for potential insect infestation, even though it had already been sitting at the docks for more than two months. He wrote: "I thought the same thing. But after the car sitting 2 months in Colon, finding all the hidden costs someone could dream up. Pay this guy, pay that guy, Oh and better pay this guy over here. Then when I go to leave the port there in Colon and some guy wants to spray this crap all over my car to kill what ever I might have brought into the country after it had been sitting in a lot for 2 months. Totally ruined a really good original paint job. If you got plenty of time and money is no object then go for it. If these cars are something you cherish, I wouldn't do it. I tried to buy off the guy spraying what ever they spray on the car but he wouldn't do it. From the smile on his face I think he enjoyed it. I think the only reason it didn't eat the paint off the car was that it started raining on the way back to PC and washed it off."

  • Your Suburban Is Too Big for Panama: In the United States there are big, wide open highways with lots of parking in front of the Walmart and it's easy to drive a huge Suburban all over the place with little additional concern. Here in Panama the streets are more narrow, lanes are tighter, and parking in often nonexistent. Vehicles that are nice and practical in the United States are absolute nightmares in Panama. And that not only applies to cars that are too big. The roads are full of potholes so small little sports cars that run low to the road are just as impractical. Also, no one owns convertibles down here because any moron with a switchblade can open it up in a second. Take a hard look at the vehicle you're thinking about shipping down, and ask yourself it that might be a practical vehicle for Panamanian streets and byways.

  • Parts and Pieces: Here in Panama Japanese cars dominate the market. There are by far many more Toyota and Nissan vehicles running around than any other, followed by Mitsubishi and Hyundai. American cars carry a very small percentage of the market. Therefore, parts and replacement pieces are much harder to come by. The other thing to think about is "American Specifications." You might be driving a vehicle that looks the same on the outside, but if you bought it in the United States then there are going to be additional things, especially for safety, impact, fuel economy, and emissions. The Toyota you buy in Panama is different than the Toyota you buy in Wisconsin.

  • Experienced Mechanics: All cars need repairs sooner or later. Since most of the vehicles here are made in Japan (or elsewhere in Asia) that means the bulk of the mechanics know the most about working on those kinds of vehicles. If you have something thats made in the US or exotic in any way, you will have a much smaller pool of available mechanics to choose from. And, God forbid you should be forced to pull into the dealer to get your car fixed, because then the prices double or triple.

  • You're Gonna Get "Dinged" The chances that you will become involved in a some kind of a minor fender-bender while here are practically 100% - sooner or later. Low speed contact accidents are very common, mostly in intersections and during lane changes in heavy traffic. Both drivers thought they could duck into that open space and they arrived in the middle, that sort of stuff. The drivers here tend to be very aggressive in traffic and minor accidents are common.

  • Gas Guzzler: Your Suburban V8 sucks down a whole lot of gas. It's not so bad when you're flying down the highways and byways of the great United States at 75 miles per hour, but in Panama you're going to be sitting in a traffic jam, going nowhere, and burning up mucho dinero in stop and go traffic.

  • Low Resale Value: For all of those reasons, nobody here in Panama will want to buy your huge American car once you finally figure out that you screwed up when you brought it down here in the first place. You'll end up selling it for much less than what you could have gotten if you had sold it in the United States before you left.

If It's About the Money: Since it's going to cost you more than $15,000 to import your Suburban that's only worth $10,000 doesn't it make more sense to sell your vehicle in the United States, and then spend the same amount of money to buy something nice down here? Something that's a little smaller physically so it's easier to drive and park in Panama, smaller more practical engine that burns less gas, maybe not so new so if it gets dinged then who cares, made in Japan so the parts and mechanics are available. Thousands of members of the community of English speaking expatriates agree - bringing a car with you doesn't make any sense from a strictly economical point of view. If it's about the money, sell it there and buy down here. We've already got this one figured out for you.

I Love My Car: If you're driving the love of your life then it might be worth it for emotional reasons. Let's say you got that '69 Impala you drove while you were in high school and you've spent ten years to have it rebuild and restored. If the situation is something like this, then all bets are off. Pay the money, pay the bribes, and be willing to order the parts and pieces from eBay. Good luck.

What I'm Driving: I drive a 15 year old Jeep that's probably worth less than $2,000 if I ever tried to sell it in this market. It still looks pretty good inside and out (I've had it painted) and it runs well (thanks to Alvaro and Campos, my mechanics). If something breaks I get it fixed. It's been dinged on all corners a little bit here and there, but if I swap paint with a taxi we both just say "I don't have time to wait for the traffic cops" and we go our separate ways. I have a huge steel bumper guard (slash) tow hitch welded to the frame on the back which has absorbed what would have been a couple of read-enders. It's an SUV and the high clearance is good for driving over curbs and pulling illegal u-turns to avoid demonstrations in Transistmica, or driving through deeply flooded streets during the rainy season. In other words, think "Mad Max" - it gets me around in this environment. And, I bought it here, used, more than ten years ago.

The Uncommon Exception: This most recent discussion on the Americans in Panama Yahoo email group was started by "Dave." It turns out he's a master mechanic who will be importing six cars, as well as the tools and equipment to maintain them, paint them, and keep them looking sharp. He also has modified the vehicles with over sized and wide tires, raised bodies, and upgraded suspensions. His personal garage can hold "six cars, and one on the lift." Obviously, if you're this guy you know what you're doing and can fix anything. Hey Dave, do you work on Jeeps?

Tell Us Your Story: Please post your comments to this article below. Let others know what you've done, what happened to you, do you agree or disagree, or have I left anything out or forgotten anything. Please and by all means, fill in the blanks. Thanks, and welcome to Panama. You're going to love it here.

Copyright 2010 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.

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Should I Bring My Car to Panama or Buy Something There? | 10 comments | Create New Account
The following comments are owned by whomever posted them. This site is not responsible for what they say.
Should I Bring My Car to Panama or Buy Something There?
Authored by: Anonymous on Wednesday, April 07 2010 @ 09:31 AM EDT

I think you cover it all, I especially like the "The Toyota you buy in Panama is different than the Toyota you buy in Wisconsin", it is so true and even applys to Chevys sold here. I beleive they are manufactered in Argentina.
One thing you didn't mention is that diesels are very popular especially in pickup trucks. Fuel cost are "usually" lower than gas and thier mileage is better.

Should I Bring My Car to Panama or Buy Something There?
Authored by: Anonymous on Thursday, April 08 2010 @ 05:48 PM EDT

For some odd reason only known to DON. He tells the worst of what will or might happen importing a car and the worst type car to import. Of course under that scenario it would not make sense. BUt if you import a car that is sold and maintained in Panama, then it makes sense to bring your good used car, especially if you consider there are no GOOD used cars in Panama.

Robert.ratliff@gmail.com

Should I Bring My Car to Panama or Buy Something There?
Authored by: Don Winner on Thursday, April 08 2010 @ 06:10 PM EDT

OK, Enlighten Us: Pick any used car with a Kelly Blue Book value of $10,000 and explain to me how it makes sense to import that vehicle from the United States to Panama. If you say I'm only picking the WORST used vehicle to import to Panama, please let us know what is the BEST used vehicle, since you appear to know. Please explain how it make sense, considering the cost to ship the vehicle, importation taxes and duties, etc. And there are good used cars in Panama. I have purchased several over the years. Just like anyplace else, people buy new cars and sell their old ones. Happens all the time.

Don

Should I Bring My Car to Panama or Buy Something There?
Authored by: Anonymous on Friday, April 09 2010 @ 08:03 AM EDT

I think some readers are missing Dons' point. No matter where the car is made if it is sold in the U.S. it is maunfactured to U.S. requirements. Meaning the same car sold here will be different than the one sold in the U.S. I had a friend who bought a used Toyota 4Runner here. When he went to get his oil changed he was told that the SUV was built in the U.S. and he would have to import a oil filter!
Bringing any car from the U.S. will cost you more to maintain.

Should I Bring My Car to Panama or Buy Something There?
Authored by: Anonymous on Sunday, April 11 2010 @ 06:51 AM EDT

I more than agree with you on the ridiculous costs (and bribes) associated with importing a car to Panama. As a result there are only a few special circumstances in which someone might consider going through that ordeal. i.e. a "pet car", the absolute steal or gift car or some other specialized vehicle.

Yes, when I came here in 2000 there were very few US Spec vehicles. However,in the past ten years, used car dealers have been importing more and more late model vehicles from the USA each year. As a result of this, I do not think the buying an International Spec vehicle over a US Spec vehicle now is necessarily always the a better choice.

The argument that the mechanics won't know how to repair them is not really as much of an issue as it may have been ten years ago. In fact, it has been my experience that there are not many mechanics that have manuals, diagnostic equipment and or knowledge on many of the International Spec vehicles. What the good ones do have is a more generic understanding or experience with automobiles and are pretty good at guessing what a problem may be and how to fix it.

The other argument regarding availability of parts is another issue. My personal experience has been that the dealers here, like most other places, maintain a minimal inventory of even the "A mover" parts and in most instances none of the "B" or "C" movers". So what happens is when you buy even a new international Spec vehicle here you may have to wait a month(s) to have the dealer order the part in from the manufacturer and shipped in on a slow boat from China. At least, with a US spec car you can find and order the parts relatively easy and quickly from the USA. Much of this issue seems to stem from the simple fact that there are not as many aftermarket producers of parts for about International Spec vehicles as there are for US Spec vehicles. The few that are out there are, only have vendors of those parts in the UK, Europe, Australia or a few South American countries. Have you ever tried to buy something from one of these foreign countries and have it shipped in here? What this boils down to is that you end up having to carry your vehicle to the dealer or have him ordering OEM parts for almost anything.

One example I can give is my 2006 Terracan with almost 90,000 KM on it has had the fuel filters changed in it twice. The first time the filters were about $65 each and the second time they were more than that and now this time the dealer wants $130 for one and $279 for the other one plus $65 labor to perform the 5 minute job of changing them. I have found one of the filters in a parts store here for about $20 and the exact same OEM filter in the UK for about $30. However, no one other than the dealer has the other filter or seems to know about it.

I own two International Spec vehicles right now (a Terracan and a Toyota Hilux) and they have both been good vehicles overall, but as a result of owning and maintaining these versus the two US spec vehicles I have owned here, my thoughts have changed regarding the importance of buying International spec.

I know finding a good used car is a challenge here but if you think about it that is the case where ever you came from. If you do buy a new car here it may not be a bad idea to consider one that is US spec. Some cars, like the Isuzu Rodeo are only made US Spec. Many of the International Spec cars are diesels and diesel fuel is cheaper here but then consider how many miles you drive each year and the added routine costs to maintain a diesel. I suspect upon analysis many folks would never see any real savings in owning a diesel.

By the way, a couple other comments. I was wondering why you are putting forth the wisdom of buying an International Spec vehicle and then in the same breath tout the virtues of your Jeep? I certainly could be wrong but I thought that Jeeps, even though some were made in Canada, were made to US spec? The other comment is that there are many, many people now that live outside Panama City, seldom go there, and need the extra passenger space for visitors, etc. therefore a small sedan to scoot around the city is of little utility to them. Trust me, I know driving a large vehicle around Panama City is a real pain and parking in lots designed for mini-cars is a problem but I really do like having that extra steel around me when I cross over the bridge and head West.

Should I Bring My Car to Panama or Buy Something There?
Authored by: Anonymous on Sunday, April 11 2010 @ 11:22 PM EDT

what are the implications of driving to Panama from North America? That would seem to eliminate the transport charge, while still maintaining the import charge, no? Is is even possible to drive from North America to Panama?

Should I Bring My Car to Panama or Buy Something There?
Authored by: Don Winner on Monday, April 12 2010 @ 12:36 PM EDT

For Dennis: The primary thrust of this article questions the logic of importing a vehicle from the United States to Panama. I bought my Jeep here, used, from a former government official, one of the guys who ran IDAAN under the administration of Mireya Moscoso. He paid the importation taxes and duties, and kept the car for five years as his wife's car but she practically never used it. It's a 1995 and I bought it in 2000 when it was five years old at a very good, below KBB value price at the time. I wanted a Jeep and this one was cherry at a good price so I picked it up. My mechanic Alvaro is a Jeep specialist, and it if wasn't for him I would be screwed. Now the car is more than 15 years old and parts are becoming harder to get. However, the original point stands - I didn't pay to have the car shipped to Panama, nor did I pay import taxes.

Don

Should I Bring My Car to Panama or Buy Something There?
Authored by: Anonymous on Thursday, April 22 2010 @ 02:27 PM EDT

Sorry, I hope this doesn't amount to hi-jacking the thread, but I need some help!

I've never been one to own a 3 box saloon (sedan in American-English, I think), would never own a Mazda 323 or Toyota Yaris, no matter how practical it would be, so last year I bought (locally) a 1994 Chevrolet Lumina Z34 (very briefly the replacement for the Monte Carlo) and learned the hard way about the difficulty of obtaining US car parts in Panama (and the horrendous costs and import duties involved in importing them!). However, i now have pretty much everything I need to get the car running (it hadn't moved in 4 years when I got it, and had to be dragged onto and off the truck to get it home). However, what I don't have is a good, cheap. mobile and ideally reasonably local (to Don Bosco) mechanic who can help get it running! Would any of the mechanics mentioned in the article or comments fit the bill? Can anyone recommend anyone, preferably with experience working on Chevy V6s (and the tools and expertise to do the timing one the engine is rebuild)?

Any help or advice would be gratefully received. Thanks.