As a member of the Andean Community, a South American trading block that includes Bolivia, Peru (auto salvage) and Colombia as its primary members, Ecuador has very strict laws concerning the importation of used and salvage vehicles from non-member nations, including those originating in the United States. As a result, someone seeking to import a U.S. used or salvage vehicle into Ecuador is likely to encounter much resistance or may find that they’re not able to at all.
However, there are certain exemptions made for the importation of used vehicles from non-Andean-Community nations, particularly as they concern Ecuadorean citizens living aboard or those seeking to work or live in Ecuador. Below, we’re going to review what these exemptions are, as well as explore the process involved in getting clearance to import a U.S. used or salvage vehicle into Ecuador. In addition, we’ll also take a look at the Ecuadorean auto market, examining makes and models that are likely to have the highest resale value in Ecuador’s notoriously expensive new and used auto markets.
Exemptions to Ecuador’s Ban on the Importation of Used Vehicles
As mentioned, Ecuador currently has a ban in place upon the importation of used vehicles from countries that are not a part of the Andean Community. However, there are exemptions to this ban, which you may or may not be able to avail yourself of depending upon your situation.
The primary exemption is granted to Ecuadorean citizens who are currently living abroad. In an effort to encourage these citizens to repatriate to the country, the Ecuadorean government is currently incentivizing the return of “household goods”, which can include automobiles.
In a nutshell, this exemption allows Ecuadorean citizens living aboard to import an entire container’s worth of household goods (without having to pay taxes on those goods) provided that they are imported within six months of repatriation. As mentioned these household goods can include one automobile, but this automobile must meet the following requirements:
- It cannot have an appraised value of more than $20,000.
- The motor cannot be larger than 3000 cc.
- The vehicle cannot be older than four years. (Age is determined by model year. So, for 2016, only model years 2013, 2014, 2015, 2016 would be permissible.)
In addition to the above requirements for the vehicle, the person importing said vehicle must have lived abroad for a period of three years or longer. In addition, the registered owner of the vehicle (as determined by the Original Certificate of Title) must match the person who is receiving the container of household goods. Finally, this form (Formulario Para La Declaración Juramentada Mneaje De Casa) must be completed and submitted with the shipment that includes the imported used or salvage U.S. vehicle.
Aside from Ecuadorean citizens, those who are moving to the country to live or work are eligible to take advantage of the above exemption. This exemption also includes the import tax break, which will be of particular interest to those looking to avoid the high costs of Ecuador’s new and used car markets.
Finally, It is worth noting that these exemptions and restrictions have been known to change frequently and without warning since they were first established in 2012. Therefore, you may wish to consult Ecuador’s customs agency before making any shipping arrangements for a used vehicle. In addition, you can also consult Ecuador’s United States Embassy for further information.
Purchasing Used or Salvage Cars at U.S. Auctions
If you’re an Ecuadorean citizen looking to return to your home country, or you’re looking to move to Ecuador for work or other reasons, taking advantage of the United States’ used car market before moving is well advised. Even when buying from a dealer, you’ll find that prices for used vehicles in the United States are much lower than what you’d pay after arriving in Ecuador.
Of course, there are ways to save even more money on used or even salvage vehicles in the United States, particularly if you take advantage of online car auctions. Through online car auction websites, as an ordinary consumer you can gain access to used and salvage car auctions that were previously only available to those possessing dealer’s licenses. Because of this, you stand to save as much as 70 or 80 percent on a used or salvage vehicle, savings that will really help when moving to Ecuador.
To get started, you merely need to create an account with an online car auction site. When doing so, you’ll be asked to make an initial deposit that will establish your bidding power. Typically speaking, the size of your deposit will represent one-tenth of your maximum bidding power (e.g. a $300 deposit allows for a $3,000 maximum bid). Once a deposit is made, you’ll be connected with an auction broker or agent who can help you through the process.
While you can go it alone, perusing the extensive databases of available used and salvage vehicles, it’s recommend that you work with your agent to find the best deals. Given that you will only be able to select from an inventory that includes this and the three previous model years, getting your agent to search auctions that can’t be displayed publically will be of particular use to you!
Shipping Your Used or Salvage U.S. Vehicle to Ecuador
As one of the larger cogs for international shipping in South America, you shouldn’t have any difficulty finding United States ports that offer shipping service to Ecuador. This includes many of the major ports in the United States, as well as some of the smaller ones.
When selecting a shipping method, keep in mind the household goods exemption! You will only want to use the container shipping method in order to import your used or salvage vehicle into Ecuador. You cannot, for example, take advantage of RORO shipping, which allows for vehicles to be rolled on and then off of the boat. (Diplomats are the only exemption to this, as they are allowed to import used vehicles on their own.)
The major ports in Ecuador include:
- Port of Guayaquil
- Port of La Libertad
- Port of Manta
Of the three, the Port of Guayaquil is the largest and serves as the main container port for the country. The other two are certainly options you can consider, however. It is important, though, that your shipment arrive within 60 days of your physical arrival in the country, and within the six-month timeframe already discussed. If the shipment does not, then you could be subject to incredibly high fees and duties. Be sure to consult with your shipper about this before booking.
Given the complexities involved in importing a U.S. used car into Ecuador as a new or returning citizen, it may be wise to work with a cargo shipping company who is experienced in such matters. If you do chose to go it alone, though, you can get more information about the Port of Guayaquil and others from this website.
Getting Your Used or Salvage Car Through U.S. Customs
When shipping a container of household goods from the United States to Ecuador, there will obviously be complications with U.S. Customs depending upon what’s included in your container. For these issues, you will want to consult with U.S. Customs and Border Protection prior to shipment in order to insure that everything is on the up-and-up for these items.
When it comes to your used vehicle, though, the process is fairly straightforward. To ship your vehicle, you will need your Original Certificate of Title and either a certified copy or two complete copies. The copy (or copies) must be presented to U.S. Customs at the departure port at least 72 hours in advance of shipping.
On the ship date, the vehicle (along with your other items) must be presented to U.S. Customs. The documentation for the vehicle will be checked and verified against the original, and customs agents will perform an inspection of your vehicle and the other contents of your container. It is IMPORTANT that this inspection be documented, as you will be required to provide proof of this inspection upon the container’s arrival in Ecuador.
Should you have any additional questions concerning clearing your used vehicle through U.S. customs, please consult this link.
Getting Your Used or Salvage Car Through Ecuadorian Customs
When presenting your vehicle (and other household goods) to Ecuadorian customs, you will be required to present the following documentation:
- Your Passport
- Your Resident Visa (For the Country from which You’re Returning)
- Proof of Transportation Insurance
- Original Receipt of Purchase for the Vehicle
- An Original Certificate of Title
- Proof of Departure Port Inspection
- An Import Permit
The final document is the most important, as you must have applied for and received an Import Permit before shipping your vehicle to Ecuador. To apply for this permit, please visit Aduana del Ecuador. *You do need to read and speak Spanish so its best to get a legal assistance.
Import Duties and Sales Tax for U.S. Vehicles Imported into Ecuador
As mentioned, Ecuador has extremely high automotive tariffs due to its membership in the Andean Community. When purchasing a used vehicle in the United States with the intention of importing it into Ecuador, it is extremely important that you factor e cost of these tariffs when determining the costs and benefits of doing so.
Regular passenger vehicles are subject to a 35% tariff, whether new or used. Customs officials will determine the value of the vehicle based upon the original receipt of purchase, with a 20% depreciation per-year applied to used and salvage vehicles. For used trucks and busses imported from the United States and other non-Andean-Community members, the tariff is 10%.
Note that if your shipment does not arrive within 60 days or your arrival in Ecuador, then other fees and duties will apply. These fees can be as high as 43% of the CIF value of the entire container (including the vehicle), so make sure that you’ve hammered down the timing of your shipment correctly.
By taking advantage of the exemption for returning Ecuadoreans and those moving to the country, you should be able to avoid taxes. However, if you find yourself in a position where they apply (due to late shipment or other difficulties), they are as follows:
- Valued Added Tax (VAT) of 12%
- Special Consumption Tax (SCT) of 5.25%
- Special Contribution to FODINFA of 0.5%
Potential Problems with Imported Used Cars in Ecuador
The protectionist trade policies of the Andean Community with regard to automobiles and automobile parts have led to lucrative and expensive new and used car markets in its member nations. While this is good for retailers, the “law of unintended consequences” has led to other issues elsewhere in the market.
For one, contraband auto parts are everywhere in the Ecuadorean auto market. In order to avoid high tariffs and taxes, importers will use a variety of methods to disguise auto parts as other less-taxed and tariffed products. Naturally, this has allowed less-than-scrupulous elements to creep into the automotive market, something one should keep in mind when looking to resell an imported vehicle.
Also, the byzantine laws that govern the importation of used vehicles into Ecuador have been known to change at the drop of a dime. Because of this, people who thought they were doing everything above board have found themselves facing incredibly high tariffs, taxes and fees, sometimes in excess of the associated vehicle’s worth. When importing a U.S. used vehicle into Ecuador, be sure you’re extra careful, and consult a customs brokers when in doubt.
The Most Popular Used Cars in Ecuador
With high costs and a recession having adverse effects on the sale of vehicles in Ecuador, there has been some recent volatility in the market. That said, Chevrolet, an American make, remains firmly entrenched as the most popular automaker in the country, owning roughly a 40% market share.
Chevrolet’s market-share domination can be seen when surveying the most popular models in the country. The top-5 most popular models are all Chevrolet, with the D-Max being by far the most popular model, followed by the Aveo Family, the Grand Vitara, the Aveo Emotion and the Sail (in that order).
Chevrolet’s closest competition for market share comes from South Korean automaker, Kia, which accounts for around 12.5%. Coming in third place is Hyundai, which owns around 11% market share.
Beyond the top three makes, it’s really a muddle. In the mid-range you’ll find Japanese makes like Toyota, Mazda and Nissan all jockeying for position. Outside of Chevrolet, which is really big business in Ecuador, the only other American brand to rate in the top 10 in terms of popularity is Ford, which at last estimate had a little less than 4% market share overall.