- This topic has 1 reply, 9 voices, and was last updated 17 years, 4 months ago by
.
-
Posts
-
I have a new car it is on a prepaid 2 year lease I have about 1.5 years left on my lease. Does anybody know the rules of bringing this car with me (via shipping) tax issues turning it back to GM at the end of lease GM regulations on taking the vehicle out of the US. Also insurance regulations and costs. If it makes sense to bring it or turn it back in before I relocate later this month. Thanks for your knowledge.
I doubt VERY much if you would be allowed to remove the car from the USA whilst still under a lease agreemenet.
This should be covered in your agreement which you might want to check.
Scott Oliver – Founder
WeLoveCostaRica.comI am very confident that taking your leased vehicle out of the U.S. or Canada would be a direct violation of the terms of your contract. Once outside the U.S., the car, the ownership of which remains with the leasing company, would be totally beyond their control and beyond their ability to recover.
It is unlikely that any legitimate shipping company would accept this car for transport because the title papers would not be in your name. In essence, it’s not yours to ship.
You might also have problems driving this car into Mexico or south from there for the same reason.
And . . . How would you propose to return it to the leasing company at the end of the lease?
I’d wager that the cost of transporting this vehicle to Costa Rica, if you could do so legally, and the cost of returning it to the U.S. at lease-end, would be greater than simply abandoning your prepayment.
Thank you Scott, I sent an eamil to GM asking them their regulations I am awaiting their response. I may just try to negotiate a purchase at this time if I am not allowed to bring it out of the country and if I will end up taking a major loss terminating the lease early. I am sure it would make the most sense to purchase a car in Costa Rica rather than transporting one and paying all the taxes and fees since this is an almost new car. But if I am allowed to bring it in on the lease I won’t have the taxes and fees due before I would return the car at the lease end so I think that would make a lot of sense.
How would you avoid paying the import taxes on this car, which if it is nearly new, will be substantial??? Then there is the cost of shipping the car, which isn’t cheap either. Those fees could far outweigh any loss you would sustain by forfeiting the lease. I drove my financed car to Mexico one year, but what I had to go through with the bank was an ordeal. Had to get a letter of permission to take the car out of the country for only X amount of days. Then I had to get extra insurance to insure against any loss.
The way I would avoid paying import tax is easy and 100% legal. I would be bringing the automobile in under my visitation visa and not as a resident which I wouldn’t be at the time. I would keep the car there for as long as my visitation visa is good. Meaning I could leave and come back every 90 days renewing my tourist status during the < 18 months that I am responsible for my auto lease. I wouldn't have to take the car with me during my times out of the country. I would maintain my Nevada registration and insurance with an added ryder purchased to cover me in Costa Rica. As far as the cost of shipping the car I would drive to California to ship it and pick it up in Jaco the cost would be leass than 2,000 dollars I was told. It makes ecconomic is sense if I am allowed to do it by GM and I am able to give it back in Costa Rica to a GM authorized dealer because I would be able to have the use of the car for 18 or so months delaying having any other out of pocket expenses for the purchase of a car. When I lived in Michigan and had leased vehicles I was able to drive into Canada legally with my leased cars and also when I drive to Mexico I am able to take my leased car there but I always purchase Mexican temp. auto insurance to cover me while I am there. I couldn't find any legal argument against taking a leased automobile out of the country, the issue for me is will I be able to turn it back at the lease end in Costa Rica without additional cost or penalities.
I don’t think it will be quite so easy – I’m copying & pasting info regarding this issue, so not my own words…
“As a foreigner in Costa Rica (a non-resident) you are allowed to drive a car with a tourist permit for 3 months without paying duty. Your initial three-month permit to drive your car in Costa Rica may be obtained at the customs office at the port of entry. Documents required are the title, and registration of the car and proof of having paid the local minimum insurance. (It is important to understand that this insurance does not cover any vehicle or any damage. You cannot obtain additional insurance locally while driving with this permit.) Mandatory liability insurance from the Instituto Nacional de Seguros is $10 for three months.
Another three-month extension is usually granted, but after six months the vehicle must leave the country or the duties paid. To get the one-time three-month extension you will have to leave the country prior to the three-month limit for 48 hours. Upon re-entry your passport will be restamped, allowing you to drive the vehicle for three more months. Warning: Do not drive the car if the permit has expired—it will be considered an abandoned vehicle and can be confiscated.
When your second 3-month extension expires, you have to either leave the country or store the vehicle in a customs storage facility until you pay the customs duties and purchase your Costa Rican license plates. Any person who brings a car to Costa Rica and pays all of the taxes, may keep the car in the country indefinitely as soon as all paperwork is completed. One advantage to bringing your vehicle yourself by land, is that you don’t have to pay taxes immediately as you do when you have your vehicle shipped by sea. Warning: if you have permanent residency status and bring a car by sea you will have to pay all of the taxes almost immediately before you can get your car out of customs.”
jreeves: Most of that article is dead on. One thing is incorrect, however. I shipped my car by sea to Costa Rica and I’m driving it around on my 2nd round of the “3-month game” with a tourist visa. So, at the end where it says you will have to pay your taxes right away, that is not right. I still haven’t paid mine since I renewed until the end of March of 2007.
Sorry vegasknit – can’t be done.
1. davidcmurray is right. There’s no way the leasing company would let you do it.
2. jreeves is right. After the second 3 month permission you’re toast. (I thought that was the case in another thread, but everyone disagreed with me, saying that while you can renew your tourist visa once, you couldn’t renew the visa for the car after the 1st 3 month period.)
3. There’s no way CR dealer or leasing agent would take it back.
I’m afraid your complicated plan to save money will surely end up costing much more. If I were you I’d negotiate the purchase, then resell it right away (unless you figure the resulting loss will be greater than paying the termination fee and getting it over with), and buy a car when you get to CR.
I’ve brought 2 cars into CR (when I didn’t know better), and purchased several others there as well (after learning the hard way). One car I drove down (something you only do once) was placed in a customs warehouse after 6 months. The bill I got for the import taxes was more than the car was worth, so I walked away from it.
vegasknit
A little know fact, by many people in the States, is that you don’t have to take your vehicle back to the leasing company when the lease has ended or during the lease period or negotiate with them ever again. Unless you want to negotiate by telling them the vehicle is a burden and you may file bankruptcy… That will make them stand up and take notice.
Take you vehicle and lease paper to any dealer and trade for a car you want. This may cost you a little bit, but it is not a hassle at all. There will be no way a mortgage company will let you take the vehicle out of the States either. Pay it off first.
There are many great vehicles to purchase in Costa Rica… and many people willing to sell. Buy a vehicle there.
I have heard many bad stories on the Great Wall vehicle, made in China.
Happy Motoring
Bill MaesThanks for all your replies. I don’t have a lot of leverage with GMAC since my lease is prepaid. I know I can purchase the vehicle and keep or sell it but that doesn’t make a whole lot of sense to me. It isn’t worth the effort. My best option seems to be returning the car to GMAC and making a settlement for an early termination. While I only have 3,000 miles on the car I am not looking to own this type of vehicle in Costa Rica. I will find a car when I get to Costa Rica and purchase it there. If it weren’t such an ordeal I thought I would keep the car till the lease end and then turn it in, but the information I was able to obtain from the lender, the CR Consulate and on here I decided to take the easy road and enjoy my life with the fewest complications. For the record GMAC would have given me the title in their name and a letter to bring to the CR consulate giving me permission to bring the car into Costa Rica, but I would have to return the car at the lease end to a GM dealer back in the US. Too much work and thinking involved.
I’m amazed that GMAC would let you take it to CR. I take back what I said. Sounds like you made the right decision though.
Good luck!
Thank you GringoTico for your information here and on all the other issues you assisted me with or just educated me to.
Just curious, Vegas . . .
Is there any prospect of selling your GMAC lease to some other private party? I just wonder if you might take a smaller loss that way. Maybe some friend or family member would be interested??
GMAC does allow for their leases to be assumed by a credit worthy lessee after the first six months of the lease for a $595 transfer fee. Vegas would not be liable for the lease after the assumption and the new lessee would have to follow the mileage restrictions and other terms of the original lease. They don’t allow lease transfers into or out of Arizona. Since Vegas has prepaid his lease payments, he would have to work out either a lump sum or monthly compensation to be paid to him by the person assuming the lease. Note that a pre-paid lease is a little unusual and I have not been involved in the assumption of a pre-paid lease but think it should follow the guidelines outlined above. You might also look at SwapALease.com or LeaseTrader.com. Vegas, if I can be of assistance with this, please let me know off list at jdtj777@yahoo.com. I am very involved in the vehicle leasing industry. Good luck on your move! Jerry
- You must be logged in to reply to this topic.
