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#1 of 19 Shipping Cars to Puerto Rico
Sep 13, 2007 (9:07 am)
How do you deal with Puerto Rico's excise tax when importing cars? Let's discuss it here!
SUVs and Smart Shopper
#2 of 19 Re: Shipping Cars to Puerto Rico [tidester]
Sep 13, 2007 (11:20 am)
Come on folks, the anticipation is killing me.
#3 of 19 Re: Shipping Cars to Puerto Rico [joel0622]
Sep 13, 2007 (11:23 am)
You want anticipation? Go try the 2008 Taurus buyers in Sedans. They started it in early August and still don't have an actual buyer!
Hope that doesn't reflect on how you are moving them.
#4 of 19 Puerto Rico new car excise tax bite... Ouch!
Sep 13, 2007 (12:04 pm)
I'm retiring to Ponce, Puerto Rico from NYC soon and have been trying to get quotes on a 2008 Chrysler Town & Country LX-H minivan (MSRP $26,190.) PR car dealers tell me they must first receive 2008 T&C inventory so the excise tax can be determined.
I called the PR tax department at 787-774-1474 and 787-774-1463 and they said they hadn't calculated it yet for the 2008 T&C. (Note: if you don't speak Spanish they put you on hold a long time to find a translator.) So I asked for the tax on the 2007 T&C LX instead and they told me $8,300. Wow, what a tax bite! That's 31.65% compared to 7.35% sales tax in NYC.
I could buy a new 2008 T&C LX-H in NYC for $25,000 cash then ship it to PR. I was quoted a 10% fee ($2500) by Flor de Mayo Express in the Bronx, 718-585-7220, to ship and insure the new T&C, but only as far as San Juan PR customs. There I would have to pay an excise tax in cash or certified check, plus $400 more for license plates and required basic no-fault collision insurance.That totals $37,380 for a new minivan that would cost me $10K less if I stayed in NYC.
I asked the PR car dealers about this option and they said they were not obliged to service nor warrant imported cars they didn't sell, and estimated their price on the car to be about $33K if I patiently waited till October when they start receiving inventory. Furthermore, they didn't give cash discounts off MSRP on new cars. The prevailing financing interest rate in PR is now 7.5% APR. And a PR bank officer confided to me that PR banks pay kickbacks to local car dealers, so the dealers have no incentive to give cash discounts.
I kept looking for more options and found a website: www.clasificadosonline.com, which is a comprehensive search engine for new and used cars in PR. Another useful site is www.elnuevodia.com which has classified auto ads from private sellers and dealers in the Ponce region.
I prefer to buy new since I intend to keep this T&C minivan under the lifetime power train warranty available. Online, I did find a liquidation sale on new? 2006 Kia Sedonas LX for $23,800 and 2007 Sedonas EX for $27,000 total out the door. I've test driven all these models in NYC and find them all acceptable. The Sedona is much cheaper and available now, and it does have a 10-year/100K mile power train warranty, if not lifetime.
So I may settle for a Kia Sedona LX when I arrive in PR. But does anyone have any suggestions how I might wind up with the 2008 T&C LX-H I really want at the best price and fastest delivery possible?
#5 of 19 Re: Puerto Rico new car excise tax bite... Ouch! [tonyv1]
Sep 13, 2007 (12:38 pm)
I just got an updated sales call from one of the five Kia dealers in PR competing for my business and he will sell me a new 2007 Kia Sedona LX for $24,000 -- that is $3K less than his competitor's best offer. Apparently new car sales in PR are at an all time low and this is great for those buying now, whatever the model may be. Make these guys undercut each other to the bone because this 30% excise tax and financing loan kickback scam are outrageous. Now if I can only get the PR Chrysler dealers into the mix. I'm sure they will jump in when they have to make way for new 2008 inventory. but I just don't like the 2007 T&Cs egg-shape styling.
#6 of 19 Re: Puerto Rico new car excise tax bite... Ouch! [tonyv1]
Sep 13, 2007 (2:51 pm)
It costs just under a grand to ship a car from Jacksonville to San Juan last I checked.
Use them, I have many many times... as far as bank commissions, all banks do this anywhere in the country. FWIW, dealers generally buy and can sell money a lot cheaper than you can. The typical dealer sends a bank more auto finance business in a day than you will in your lifetime.
Dealers either get a flat fee of $200-400 per contract if they sell the money at cost, which is usually 2-3% under what the same bank will charge a retail customer who walks into a branch, or they get a percentage of the rate markup, generally not to exceed 3% over the buy rate.
#7 of 19 Re: Puerto Rico new car excise tax bite... Ouch! [im_brentwood]
Sep 13, 2007 (3:49 pm)
I assume you're talking about shipping a new car, as I am. Can you please share what percentage of MSRP you had to pay as excise tax? Was it in the 30% range or what? I got my info about 2007 and 2008 new car excise tax rates directly from the PR taxation department today. Also, did you encounter any problems with local dealers honoring your new car warranty since you purchased it in Florida? This info may be helpful in my negotiations with the PR car dealers. If you shipped a used car, it would be useful to know the particulars of that too if you want to tell us.
#8 of 19 Re: Puerto Rico new car excise tax bite... Ouch! [tonyv1]
Sep 13, 2007 (8:14 pm)
I'm a dealer, we used to send a lot of used cars there.
Since you mentioned that you are in NY, ask what happens if you relocate to PR.. are you still charged the taxes? Might make sense to buy it here, keep it here for 6 months or so with NY plates and then ship it to PR.
Your warranty should apply in Puerto Rico, it's part of the USA. As far as excise tax goes.. eh, it's not as bad as paying income taxes!
#9 of 19 Re: Puerto Rico new car excise tax bite... Ouch! [im_brentwood]
Sep 13, 2007 (9:41 pm)
I did ask those questions. If I bought and registered a new car in NYS, I would have to pay the 7.35% sales tax plus $250 for registration and license plates, plus NYS comprehensive insurance costing at least $500 for six months through Geico.
According to the phone conversation I had with the PR tax department in my broken Spanish, current law does not provide any particular time span for which I could wait to avoid the full PR excise tax on the original MSRP, not even based on the lower cash price I paid. If and when I shipped the now used car to PR, I would have paid taxes twice, NYS and PR taxes, for a combined total of nearly 40%. No way, even if I drove the car down to Jacksonville to save on the shipping costs.
Now you admit you are a dealer, so you qualify to ship cars to another dealer in PR and get special resale tax exemption because it is your business to sell and ship cars. But for the average consumer like me, we pay the full tariff.
And although technically a USA new car warranty is valid in Puerto Rico, as a dealer you know that local dealers take better care of their loyal customers than out of state strangers. It can be the difference between getting a loaner and speedy warranty work approval, rather than waiting a week for a mere service appointment and then more weeks with an expensive run-around to teach you a lesson for trying to beat them out of a new car sale and their bank loan bonus. If the dealer isn't making money off you, he's going to gouge you when he can, or discourage you from bothering him for free warranty service on his dime.
But you did confirm this loan collusion between bankers and car dealers I was previously naive of. I am trying to use my own bank loan ploy. Instead of applying for a 7.5% PR bank auto loan, I will instead apply for a 5.5% secured home improvement loan and I will use that money to purchase the car for cash. Even though PR dealers say they don't give cash discounts, I've already knocked off $6000 on 2007 Kia Sedona pricing just playing them off against each other by long distance phone, and I haven't even shown up yet in person to really turn the screws with cash on the table.
By using a home improvement loan, I save two points on the interest and I can also deduct all that yearly interest on my tax return, so I get a double saving. Of course, I will need two checking accounts at totally separate banks because if one bank notices I borrowed $24K for a home improvement loan then promptly wrote a $24K check for a new car, they would catch me cold. I haven't actually arrived in PR to pull it off yet, but it's a plan.
I can't hold out too long because PR dealers only have a few 2007 Kia silver color Sedona LX I would consider and it's first come, first served. So I placed a refundable $500 deposit by phone on my credit card to hold a new minivan I want until I can arrive in PR in two more weeks to test drive it, or the vehicle could be gone by then. If I change my mind about the Sedona, or the Chrysler dealer gives me competitive pricing on the 2008 T&C LX I really want, I can get my Sedona refund back, much more easily from a credit card than a cashed check.
I've always had to file a claim with the local consumer affairs agency that licenses auto dealers to get a cashed refund back because the dealers will stall till hell freezes over or you give up in frustration. So a credit card deposit is the only way to go to maintain control.
Oddly, only the PR Kia salespeople are willing to slash prices by thousands. Odyssey, Toyota and Chrysler dealers vainly try to hold the line on pricing, over the phone anyway. They are backed up to the gills with stock and still quote over $30K for cars with invoices under $24K. Of course, they all claim Kia is an inferior minivan, but many reviews and my own test drive in NYC found it comparable with the others at a better price.
Now, longterm Kia warranty service may turn out to be a problem in PR, as it is in the US. But I won't know until I actually need it. Until then, I'll save as much upfront money as I can and try to establish a good longterm relationship with my local dealer.
Finally, to be complete, I should address the issue of gap auto insurance in PR, as I undersand it from afar, not having bought it yet. When you pay about $400 in PR for your registration and license, the fee also includes a year's worth of minimum basic no fault collision and bodily injury insurance that is woefully inadequate if you suffer or cause major damage and injuries, or have a total loss from robbery. You can buy private gap insurance at the going rates from the usual major insurance carriers, for whatever coverage and deductions you require.
My relatives in PR scoff at this. They claim hardly anyone there buys insurance, not even home insurance, which boggles the typical American litigation mindset. It is Puerto Rico and apparently too hot to argue or worry. I think it's because it is an expense they really can't afford with the low salaries and high cost of Americanized living down there. There are as many shopping malls as palm trees now.
I'm definitely going to get me some gap insurance for both my new home and car, cause I'll sue the hell out of anyone who messes with a Nuyorican like me.
#10 of 19 Re: Puerto Rico new car excise tax bite... Ouch! [tonyv1]
Sep 14, 2007 (9:50 am)
Well to tie up this saga, I did wind up buying the 2006 Kia Grand Sedona LX, with full new car warranty, in color silver, by phone, from AutoSuperstore in Ponce PR for $24K plus $250 for license plate, reg and minimum insurance. I qualified for a US bank 5% car loan for 60 months with $20K comprehensive gap insurance that will run me just under $500 per month. So apparently, you can overcome the PR auto excise tax bite if you catch the right liquidation sale on the right overstocked car. By all rights, if I had bought that same car in 2006, the MSRP was $23K. The excise tax would have been over 30%, so my retail price would have been about $30,000. Buying now saved me $6,000. I could have pushed my luck and tried to hold out longer, but there were only a few silver new 2006 Kia minivans left on the entire island and I didn't want to lose out to another buyer. I did have a local mechanic acquaintance check out the minivan before I closed the deal because 2006 Sedonas do have two recalls for brakes, hydraulics and electrical wiring problems. The mechanic cleared it and the Sedona awaits my arrival and usage. That's all folks!