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Smart Shopper Shipping Cars to Puerto Rico
18 messages, Last post on Sep 25, 2007 at 6:28 AM
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Replying to: tonyv1 (Sep 13, 2007 12:04 pm)
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Replying to: tonyv1 (Sep 13, 2007 12:38 pm) http://www.trailerbridge.com/default.asp 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.
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Replying to: im_brentwood (Sep 13, 2007 2:51 pm)
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Replying to: tonyv1 (Sep 13, 2007 3:49 pm) 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!
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Replying to: im_brentwood (Sep 13, 2007 8:14 pm) 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. 
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Replying to: tonyv1 (Sep 13, 2007 9:41 pm) 
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Replying to: tonyv1 (Sep 14, 2007 9:50 am) 5% is a killer rate, I assume that's a home equity loan, correct? If so, it's the cheapest way to finance because the interest is tax-deductible. Generally any business that sells a product or service is going to make money on it, economics 101. I recall one customer that we had who showed up with their own financing "because we would just mark up the rate". It was through her local bank, First Union at 7.75%. I asked her if I could get her financing through First Union for 6.95% would she be interested? She couldn't believe that we could do it, I explained that we bought money from FU for about 6% and sold it for about 7%, and that their normal retail rate for their customers was 7.75 and people off the street it was 8-8.25%. I explained that we do mark up the rate, but was she better off paying us 7% and us making a comission, or was she better off dealing with First Union directly and paying more for the money? We ended up using Chase with her because I got the rate down another half a point. Here's another example, Volvo Finance, at the end of the 1998 model year, offered unadvertised 0% finance for 36 months on S70 and V70 cars. The requirement was 40% of the MSRP as a down payment and Tier 1, 2 or 3 credit... even if you had a 660 becaon score, you qualified! We got a $200-300 flat fee per contract from Volvo Finance like every deal we did with them at the buy rate. We converted virtually every single cash customer into this program, and why wouldn't we? We made money and the customer got to borrow about $15-20,000 for free for 3 years. I told every cash customer that was planning on paying cash to take the money, throw it in a CD for 3 years and even at 5% on $15,000 they would make $2,250. If I can sell you money cheaper than your own bank will and make money on it, how is that collusion or a kickback? It's neither. Collusion is when competitors fix prices, such as all Chevrolet dealers agreeing to sell cars for no less than $X, and it does happen but it's rare. A kickback is a bribe, a payment for doing something illegal or unethical.
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Replying to: im_brentwood (Sep 14, 2007 4:03 pm) |
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After going through all those commotions to deal with the 30% Puerto Rico excise tax on new cars, by mere chance I came across an internet ad on clasificadosonline.com over the weekend for a new silver 2007 Caravan SXT (not Grand Caravan) with 3.3 liter 170 HP engine and cruise control (no Stow N Go) and full lifetime powertrain warranty, for nearly $2K below invoice. I bought it cash for $20K and totally avoided the new car excise tax. I don't know how because I called the PR tax department again to be sure and they told me the excise tax on that new car should be $6,200, But apparently when a dealer needs to make room for new inventory, they do whatever it takes to clear the lot and sidestep the tax, so I'm not looking this gift horse in the mouth. I did have a mechanic check it out to make sure it's not a lemon, and he says it's an incredible bargain. He wants one to resell at a profit. So go figure, sometimes you just fall into dumb luck. 
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Replying to: tonyv1 (Sep 17, 2007 9:01 am) |
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