Home to the largest deep-water port in all of Central America, Honduras is naturally an attractive destination for someone looking to import used or salvage U.S. vehicles into Central America. However, one needs to understand that there are a number of difficulties of Honduras imports, what an importer might encounter both at the border and after clearing a vehicle through Honduran customs. For one, the used and new car markets in Honduras are somewhat off-kilter these days thanks to incredibly lax (and even non-existent) vehicle registration procedures.
If you know what to do, though, you may find that the used car market in Honduras could work particularly well for you as an importer of U.S. used and salvage vehicles. Below, we’re going to review everything you need to know about importing a U.S. used or salvage vehicle into Honduras. We’ll review the difficulties that may crop up along the way, as well as ways in which you might be able to obviate said difficulties. Finally, we’ll take a look at popular makes and models in the country, helping you to target used and salvage vehicles that will turn that highest profits.
Purchasing Used or Salvage Cars at U.S. Auctions
Buying a used or salvage vehicle in the United States has never been easier. This is due in no small part to online used car auctions, which provide ordinary consumers and importer/exporters with access to auctions for used and salvage vehicles that had previously been available only to those with dealer’s licenses. These websites are able to do this because they list vehicles from certain dealer-only auction houses on their site so that you get access to this inventory at great prices.
Best of all, online used car auctions are incredibly easy to participate in, no more or less difficult than your average EBay auction! To get started, you simply make an initial deposit that establishes your bidding power, typically with your deposit representing 10% of your maximum potential bid. After that, you’ll be setup with an account and assigned to an agent / broker. He or she can help you locate used or salvage vehicles in which you might be interested, or you can simply browse the available inventory that’s publically displayed.
Do note, though, that auctions and vehicles that can be publically displayed online are limited. That’s why it’s always a good idea to work with your agent or broker. He or she can grant you access to auctions and vehicles that aren’t open to the general public through the online database, thereby dramatically increasing the likelihood that you’ll find a used or salvage vehicle that will be right for your needs!
Shipping Your Used or Salvage U.S. Vehicle to Honduras
The majority of major ports in the United States offer shipping to Honduras, as do several smaller ports. In fact, Honduras is home to the largest deep-water port in Central America, Puerto Cortés, which means it should be easy to find competitive shipping rates for U.S. used and salvage vehicles that are to be imported into Honduras.
When shipping to Honduras, you will also have the option of choosing between traditional container shipping and something known as RORO shipping. The latter refers to “roll-on roll-off” shipping, which does offer some benefits, particularly if you’re looking to cut shipping costs for your used or salvage U.S. vehicle.
With RORO shipping, your vehicle will simply be rolled on to the boat at the departure port and then rolled off at the arrival port. Because there are no containers involved, this form of shipping is cheaper and also more convenient. That said, there are risks. Given that a container will not protect your vehicle and that your vehicle may have to be moved during transit, the possibility for damage occurring to your vehicle is certainly there.
Honduran ports accept both forms of shipping, so the choice is entirely yours and dependent upon your budget and financial goals. In terms of arrival ports in Honduras, there are several options, including:
- Puerto Cortés
- Puerto Castilla
- San Lorenzo
- And More
Puerto Cortés is by far the largest port in Honduras and the only one operating as a container terminal. That said, shipping can be arranged to the others. San Lorenzo may be of particular interest to those shipping from the west coast of the United States, as it is the only Honduran port based on the Pacific Ocean.
For more information about Honduran ports and to get in touch with the port authority for Honduras, you can visit the website for the Empresa Nacional Portuaria (ENP).
Getting Your Used or Salvage Car Through U.S. Customs
Once you’ve arranged for shipment of your U.S. used or salvage vehicle to Honduras, you’ll need to clear that vehicle through U.S. customs. The first step will be to secure the vehicle’s Original Certificate of Title in addition to copies. For copies, you will either need a certified copy of the original or two complete copies of the original. These copies must be provided to U.S. customs at your vehicle’s departure port at least 72 hours in advance of your ship date.
On the day of shipping, the vehicle will need to be presented to U.S. customs at your departure port along with the Original Certificate of Title. The original will be checked alongside the copies already provided, and an inspection of the vehicle will be performed. Provided that everything checks out, the vehicle will then be cleared to be loaded onto the ship.
If you need to find out where your car should be presented at the departure port, simply contact the Port Director. In addition, should you have any further questions about clearing U.S. customs with your used or salvage vehicle, you can visit the website for U.S. Customs and Border Protection.
Getting Your Used or Salvage Car Through Honduran Customs
Clearing a vehicle through Honduran customs is relatively straightforward, but it can be time consuming. The following documents are required when presenting the vehicle for clearance upon arrival:
- Your Passport (If Applicable)
- The Vehicle’s Original Title
- An Original Bill of Landing
- An Original Commercial Invoice (If Applicable)
- Registro Tributario Nacional (RTN)
The Original Bill of Landing must be detailed and include the following information about the vehicle:
- Vehicle Identification Number (VIN)
- Vehicle Type (SUV, Sedan, Truck, etc.)
- Number of Doors
- Fuel Type
- Engine Number
- Engine Size
- Vehicle Weight
- Vehicle Volume
It is vitally important that all of this information be present on the Original Bill of Landing, otherwise you may be subject to fines in order to clear your vehicle through customs. Additionally, you can expect a wait time for clearance of anywhere between several days to a week-and-a-half depending upon whether it was shipped as a full-container load or a less-than-container load.
Since 2002, the Honduran government has restricted the kinds of used vehicles that are permitted to be imported into the country. First, all right-hand-drive vehicles are prohibited from importation. Currently, used vehicles that are seven years or older are not allowed to be imported. Passenger busses are also subject to a restriction. However, they are permitted to be no older than thirteen years.
This rule is not without exception, however. The Honduran government will permit used vehicles that are considered to be classics or collectibles to be imported into the country if they are seven years or older. However, it is advised that you seek approval for the exemption before attempting to import a classic or collectible vehicle into Honduras.
Import Duties and Sales Tax for U.S. Vehicles Imported into Honduras
In recent years, the government of Honduras has lessened restrictions placed upon the importation of used and salvage or updated vehicles into the country. Until only a few years ago, in fact, only those who were registered diplomats were permitted to import used vehicles into the country. This is, however, not the case any longer.
Even so, the tariffs and taxes imposed on used and salvage vehicles imported into Honduras are somewhat protectionist. For passenger vehicles, a 3.4% tariff based upon the CIF (Cost, Insurance, Freight) of the vehicle is imposed. For trucks, a sliding CIF-based tariff that varies from 6.8% to 10.2%, depending upon the size of the truck’s engine, is imposed. Finally, there is no tariff imposed upon the importation of auto parts.
While the tariffs are not bad, especially compared to Honduras’ neighbors, the taxes are onerous. For one, imported U.S. vehicles that are sold in Honduras will be subject to 12% sales tax, although trucks are exempted from this sales tax. The used car market is somewhat protected from Honduras’ tax structure, though, given that new vehicles are subjected to a 10% luxury tax.
As a member of the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR), there had previously been both tariff and tax relief for new and used vehicles originating in the United States. However, much of that relief has been phased out on a rolling basis over the past decade. Be sure to research this thoroughly when calculating the total cost of importing a U.S.-origin used or salvage vehicle into Honduras.
Registering Your Imported Used or Salvage Vehicle in Honduras
Car registration is actually quite a large problem in Honduras, with as many as a quarter-of-a-million cars on the country’s roads currently unregistered and without license plates. The Honduran government failing to fund the necessary infrastructure required to have a comprehensive vehicle registration program created this huge problem.
In order to deal with this issue, the government in Honduras has elected to privatize the car registration process. However, the initiative, which is called the Project on Operations, Finance and Administration of the Registry of Vehicular Property is currently in the pre-qualification phases, with companies from several different countries supplying bids to Honduras’ Commission for the Promotion of Public Private Partnerships (COALIANZA).
With this privatization effort still slow to get moving, registering a car in Honduras isn’t as easy as following a few steps. While you could go about the process, you might find yourself waiting months or even years to receive a license plate, as the government is often unable to provide them. This is not an excuse to skip the registration process entirely, but it is something to be aware of.
Potential Problems in the Honduran Used Car Market
With a staggering number of Honduran cars, both new and used, unregistered and in many cases unable to be registered, there is obviously a problem with both grey and black markets in Honduran auto sales. For the would-be importer of U.S. used and salvage vehicles into Honduras, there is reason for caution. In the near term, it might be best to see how the government’s efforts to deal with the registration issue pan out.
There are, however, other concerns. When one couples the registration problem with the fact that Honduras remains one of the most violent countries in the world, you have a recipe for peril. To put things into perspective, note that the murder rate stands at about 60 per 10,000 people, with much of the violence connected to organized crime. While organized crime concerns itself more with things other than used and salvage vehicles, the potential for overlap is disconcerting to say the least. Needless to say, be careful as an importer.
The Most Popular and Least Popular Used Cars in Honduras
The Honduran used car market tends to follow the trends of other neighboring nations. Toyota and Nissan lead the way in terms of market share with roughly 21% and 14% between the two of them respectively (when data was last calculated). Ford and Chevrolet are the most popular United States makes in Honduras, owning roughly 8% and 6% of the auto market, respectively. Finally, BMW remains the most popular luxury brand, coming in at the 7th most popular make overall with a 5% market share.
As it is elsewhere in South and Central America, the Toyota Hilux remains the most popular vehicle sold in Honduras overall, accounting for nearly 10% of all cars sold in any given year. Lagging behind by nearly 5% each, the Nissan Frontier and the Isuzu D-Max are the third and second most popular makes and models overall. For American vehicles, the Ford Ranger and the Chevrolet Silverado are the most popular in the country. Both have seen their sales increase year-over-year, presenting an interesting opportunity for an importer of U.S. used vehicles into Honduras.