Sharing a long border with the United States, Mexico has always been an important trading partner for the country. This is true when the two countries’ automobile industries, have become linked to one another in recent years. As such, many are wondering about what’s involved when importing used vehicles from the United States into Mexico.
While NAFTA may lead some to believe that the process is incredibly easy, the truth is otherwise. Mexico has enacted a number of trade barriers to protect its automotive manufacturing industry. Particularly when it comes to used vehicles. If you understand the restrictions, what’s involved with clearing customs and paying import duties and fees. You should be able to import almost any used U.S. vehicle you want into Mexico. Below, we’re going to share this vital information. We’ll even discuss the very best way to get a deal on a used vehicle in the United States.
Restrictions on Importing Used Cars into Mexico from the U.S.
Before attempting to purchase a used or salvage car in the United States that will be subsequently imported into Mexico. It’s important to understand that there are restrictions put in place by the Mexican government. Understanding what these restrictions are will help to ensure that you don’t encounter any problems once you’ve shipped your used or salvage vehicle to Mexico.
With respect to salvage vehicles, it’s important to understand that Mexico will not permit the importation of any vehicle that is not roadworthy. Therefore, if you do purchase from a salvage car auction in the United States, you will need to get the vehicle roadworthy once again before exporting it. Note that this means salvage vehicles cannot be imported into Mexico for the purpose of supplying spare parts. Also, if the vehicle has a salvage title but is still “roadworthy”, it nonetheless must receive a clear title from the DMV.
In addition to this, note that there are strict limitations placed upon the number of vehicles an individual, business, or proprietor can import into Mexico per every 12-month period.
Namely, one is only permitted to import one vehicle (new or used) per 12-month period. In order to import more vehicles than this, one will need to register as an importer with the Padron de Importadores. Note that if you will be importing used vehicles into Mexico as part of a business, you will also be required to file monthly import records with the Servicio de Administración Tributaria (SAT).
Things get more complex from here. For example, there are special procedures that one will have to undertake in order to import a classic vehicle from the United States into Mexico. For more on this, you can consult this guide (offered in Spanish) provided by the SAT. Aside from this, there are a number of other discrete requirements for used vehicles imported into the country. As an example, Mexico prohibits the importation of used vehicles that cannot be operated on the highway. For more on this, you can consult this document that was created by the United States Department of Commerce and the International Trade Administration.
Those who are interested in importing used U.S. vehicles into Mexico for the long term do have some good news to which they can look forward. Starting in 2009, many of the restrictions pertaining to the importation of used vehicles were put on a 10-year phase out period. This means that by 2019, one should be able to import used and salvaged vehicles from the United States into Mexico with much greater ease than they can today.
Purchasing Used Vehicles at U.S. Online Car Auctions
It has long been known that used car auctions are the very best way to get a deal on a vehicle in the United States. However, until recent years, such auctions were largely restricted to those in possession of a dealer’s license. Not any more! That’s thanks to online car auctions, which provide users with access to used car auctions taking place across the country every day, and all without the need to have a dealer’s license.
To get started, you will need to set up an account with an online car auction site and make an initial deposit. This deposit will establish your bidding power, with its value typically representing 10% of what your maximum bid on used and salvage vehicles can be. For example, were you to make a deposit of $1,000, you would then be able to bid up to $10,000 on a used vehicle (or vehicles)!
Aside from the prospects for savings, the best thing about online car auctions is their convenience. From the comfort of your own home, you can browse an extensive database of used car auctions, finding the vehicle (or vehicles) that meet your needs exactly. To help you through the process, you’ll also be connected with an experienced auction agent or broker. He or she can even connect you with used car auctions that cannot be displayed publically. All told, this method provides you with the very best chance of finding the right used car at a rock-bottom price.
Shipping a Used or Salvage U.S. Car to Mexico
Sharing a border with the United States, you can ship your used vehicle to Mexico via a car transport truck. However, depending upon where you are in the United States and what your particular needs are, you may also wish to ship your used vehicle over water.
When shipping over water, you will have two primary modes of shipping to choose from. The first is traditional container shipping, and the second is RORO shipping. This latter option stands for “roll-on roll-off” shipping and is the cheaper of the two. When shipping by this method, your used vehicle will simply be rolled onto the ship at the port of departure and then rolled off once it arrives in Mexico. Because there is less labor involved, the savings can be passed on to you. The only drawback is that this shipping method does pose a greater risk for damage occurring during transit, although this risk is rather minimal.
There are a number of large container ports along Mexico’s coastline, as well as a number of smaller ports that can accommodate vehicles arriving via the RORO method.
Of the container ports, though, the largest is in the Port of Lazaro Cardenas, which processes over 30-million tons of cargo every year. In addition, there is also the Manzanillo Port and the Veracruz Port, which are the second and third largest ports in the country respectively. Outside of these three, there are a number of other smaller container ports, as well.
When choosing a destination for your used car in Mexico, you can check out the port authorities for the top three ports:
And, of course, depending upon your needs, you may be able to find another port that will work particularly well for you. Simple research should connect you with a port that’s convenient to your used vehicle’s ultimate destination.
Clearing Your Used Vehicle Shipped to Mexico Through U.S. Customs
In order to clear your used vehicle through U.S. customs, you will need to do two things. First, you will need to gather the relevant documentation. Second, you will need to submit this documentation and your vehicle to U.S. customs at your chosen port of departure at least 72-hours in advance of your ship date. (To find out where this will be at your chosen port, simply contact that port’s director.)
As far as documentation is concerned, you will need the used vehicle’s Original Certificate of Title. In addition, you will also need either a certified copy of the title, or you will need two complete copies.
Once U.S. customs has taken possession of your vehicle and documentation, they will do two things. First, they will inspect the vehicle to ensure that nothing illegal has been stowed away. Second, they will verify your documentation, checking to see that it accurately reflects the vehicle you’ve submitted. Provided everything checks out, the vehicle is cleared and sent to Mexico.
To answer any additional questions you might have about clearing a used vehicle through customs, please consult this guide put together by U.S. Customs and Border Security.
Getting Your Used or Salvage Car Through Mexican Customs
The numerous and sometimes confusing restrictions placed upon imported used cars by the Mexican government not withstanding. The process for actually clearing a car through Mexican customs is incredibly straightforward. Once the vehicle arrives, you will need to furnish the following documentation to Mexican customs:
- The Original Certificate of Title
- The Original U.S. Vehicle Registration
- Proof of Insurance
- Your Driver’s License (Mexican or U.S.)
- NAFTA Certificate of Origin*
* This is necessary if you wish to take advantage of duty-free import for used cars originating in NAFTA member nations.
In addition to presenting the above documentation to Mexican customs agents, you will pay the requisite duties, taxes and fees. This is in the outline below. Also, you will need to demonstrate proof that the vehicle meets the roadworthiness, safety and environmental standards of Mexico. (Generally speaking, these standards are the same as you’ll find in most U.S. states, but there are some exceptions.)
Should you have any further questions about how you will clear your used U.S. vehicle through Mexican customs. Please consult the official website for the Mexican customs authority.
Import Duties and Taxes for U.S. Vehicles Imported into Mexico
Mexico is a member of the North-Atlantic Free-Trade Agreement (NAFTA). This affords breaks in duties and taxes to those importing used vehicles from the US. To be qualified, you must show a NAFTA Certificate of Origin to Mexican customs agents when your used vehicle arrives.
Provided you can do this, you will not need to pay an import duty for your vehicle. If you cannot provide a NAFTA Certificate of Origin, you will pay 50% duty on the value of the vehicle. Determined by Mexican customs in accordance with standard price lists like those provided by Edmunds and Kelley Blue Book.
There are three kinds of taxes on used vehicles imported into Mexico from the United States. The Value Added Tax (VAT) is 16%. This is regardless of what Mexican state to which you import your vehicle. There is also a General Import Tax (IGI) on vehicles that are five-years or older:
- 5 Years Old: 1% of the Vehicle’s Value + $300 USD
- 6 Years Old: 1% of the Vehicle’s Value + $250 USD
- 7 Years Old: 1% of the Vehicle’s Value + $200 USD
- 8 Years Old: 1% of the Vehicle’s Value + $150 USD
- 9 Years Old: 1% of the Vehicle’s Value + $100 USD
- 10 Years or Older: 1% of the Vehicle’s Value + $50 USD
A vehicle’s age is determined by the model year and not by the date of purchase or manufacture.
Ad valorem tax differs depending on where in Mexico you’re importing from and the age of the vehicle. When importing to states along the U.S.-Mexico border (Baja, Sonora, etc.), vehicles that are between five and 10 years old are subject to a 1% tax. If the vehicle is older than 10 years, then it is subject to a 10% tax. For regions outside of the border, that ad valorem tax is 10% for used vehicles between 4-9 years old. (Age is calculated based upon model year and not date of purchase or manufacture.)
For more information about taxes payable on used U.S. vehicles imported into Mexico, please consult the Servsicio de Administración Tributaria (SAT).