Buying a new or used car or truck in Puerto Rico, insurance, theft

ClasificadosOnline.com is the major classified ad provider in Puerto Rico for cars, trucks, and other products and services. One problem with Clasificados Online is that the posts are not date-stamped, although it seems they are relatively new, since I think they expire 45 days after posted.  How can you know how old a post is when there is no date?   It shouldn’t be difficult for them to list the dates for when a post was made, so readers know how long ago the ad was posted.

Others car selling websites are
http://clasificadospr.com/r/vehiculos-carros
https://www.autospr.com
http://Craigslist.com is not well known or used in Puerto Rico. In addition, there are far more car scam listings on Craigslist. There are a few easy ways to detect the scam car listings. When you see photos of the car with a background landscape that is outside of PR, the scammers likely grabbed a photo from a random car that was listed for sale in the states. In addition, the fake posts usually don’t list a city within PR and are priced unrealistically low.  For example, if you see a car that normally sells for $15,000 priced for only $3,000, it is a scam.  They will give you some phony excuse for why they cannot show you the car.  Then they will ask you to send money to them before you see the car in person.  If you do that, your money will be gone and you will never see the car other than in photos.

Click here to see a list of bad car dealers that should be avoided.  DO NOT GIVE YOUR MONEY to a dishonest car dealer!  Working together, with your help, we can avoid the bad dealers, causing them to lose sales, and eventually go out of business.

I have found poor service in Puerto Rico relative to that encountered in the states.  Most, meaning about 90-95%, do not respond to emails.  This includes lazy car dealers and car salespeople in PR.  Try to give your money and support to someone who provides a responsible, courteous, considerate shopping experience. Bad behavior should be punished. Good behavior should be rewarded. I try to support those that provide good service, clear communication, and are responsive. In the long run, those with poor business practices will go out of business or be stuck with whatever they are trying to sell. Those with good business practices will succeed and grow.

Most car dealers will falsely claim they will give you the “best” price.  This is mathematically impossible, unless its a tie.  How are, for example, the approximately 20 car dealers for each brand going to give you the best price for the same new car.  Only one can give you the best price.  It would be akin to saying in a marathon every runner is going to come in 1st place.  In reality, only one runner will come in first place, other than if there is a tie.  In addition, no car dealer going to tell you that their price is not the best.  How is that possible?  Their price is best FOR THEM, not you.  That’s why it is critical to shop around.

Some lazy car dealers won’t list a price in advertisements or give you a price unless you go to the dealer.  Such dealers know their prices are high, and if they told you ahead of time, you would not waste time going to the dealership.  Do not waste your time on dealers who do not give you a price.  The ones who are more confident that their prices are good will not be afraid to list the prices in their advertisements.  You are the buyer, so the dealer should cater to your needs.   Tell them, “no price = no sale,” and that you will not consider buying from them if they do not give you a price.

Most car dealers will try to claim that you should not buy on price alone, because they offer the “best” service.  This is also a lie for the same reasons directly above.  Only one of them could possibly offer the best service, and that is hard to compare and measure, whereas the price of a car is easy to compare and measure.  All things being equal, on a new car, you SHOULD buy on price alone, from the dealer who gives you the best price.  The most effective way to do this, after selecting the exact car you want, is to have ALL the dealers for your particular brand, such as Acura, Audi, Bentley, Buick, Cadillac, Chevrolet, Chevy, Chrysler, Dodge, Fiat, Ford, GM, General Motors, Honda, Hummer, Hyundai, Infiniti, Jaguar, Kia, Lamborghini, Land Rover, Lexus, Lincoln, Lotus, Maserati, Mazda, Mercedes, Mercedes Benz, Mercedes-Benz, Mercury, Mitsubishi, Nissan, Pontiac, Porsche, Ram, Renault, Rolls Royce, Saab, Saturn, Scion, Smart, Suzuki, Toyota, Volkswagen, Volvo, etc present a selling offer for the car you want.  You want to make the car dealers compete for your hard-earned money.  Whoever offers you the lowest price for the exact model and options you specify will be the one that has the best price.  Beware of certain car dealers quoting you a price on the car you want, but trying to trick you by not including the options you requested.  In addition, be sure to specify that you want the price to include ALL taxes, fees, licensing, registration, destination charges, etc.  Do not let any of them fool you if they try to add on extra charges, since you specified upfront for the quote to include everything.

If you want to buy a new car, visit the dealers closest to you to find the exact model you want. After you have decided on an exact model, then go to the manufacturer’s website to find ALL of the dealers on the island selling that brand. Then contact all of those dealers to give them an opportunity to quote you a price for the car you want. Let them know that you will be comparing their price to the competing car dealers and will buy from the one who offers you the lowest price. Do not fall for any lies they tell you.

If you want to finance a car, or have a trade in, have them quote the trade in and finance charges separately from the price of the car you want to buy.  Ask them what price they would pay for your car, if you didn’t trade it in.  That is the real price they are giving you for your car.  The only way they can give you more for your trade-in is by charging you more for the car you are buying!  Car dealers, both for new and used cars, will try to confuse and trick you by combining the finance charges and trade-in of your used car.   If you finance a car, you want to know the interest rate you are paying.  Focus on that more so than the monthly payment.  The finance department and a car dealer is a big profit center.  They will try to trick you with so-called, low monthly payments, but extend the length of your car loan, for example from 60 months to 84 months.  Yes, this could lower your monthly payment, but you might be paying far more in total interest charges.   Don’t be afraid to walk out if the car dealer or salesman is not treating you correctly.  In addition, don’t believe the salesman when he claims he is going to fight for you to get a better price.  The car salesman wants you to pay as high a price as possible, because his commission is a percentage of the profit.  Again, the best way to buy a new car is by having ALL the dealers for your particular brand bid on the car you want, with the options you specify.  Just be sure that they don’t lie to you by taking away the options you asked for, or by trying to add on ANY extra charges.  If they try to pull that, then walk out!

Recap:  If buying a new car, ask several of the new car dealers to quote you

1  TOTAL price of the car with the options you want including tags, license, delivery and all other deceptive add-on fees.
2  If you are financing, understand what interest rate you are being charged.  Compare the interest rate the dealer offers you with that offered at banks and credit unions.  Do not focus on the monthly payment amount!  This is how car dealers trick you, by raising the price of the car, raising the interest rate, or raising the quantity of payments required while lowering your monthly payment.  For example, on a $10,000 car, ignoring interest costs for a moment, you could pay $500 a month for 20 months or $10,000 total.  The dealer might offer you a deal to instead pay $250 per month, but stretch out your monthly payments to 60 months, paying $15,000 total, or $5,000 more.   You might be fooled with a $250 monthly payment instead of a $500 monthly payment, but you will be making payments for 50 months instead of 20 months, and paying $5000 more!  This happens when the dealer misdirects your attention to the monthly price so you forget to focus on the individual components of the car price and interest rate.
3  If you have a trade-in, ask them the price they would pay for the car outright, as if you were not trading it in.  Then consider if you want to take the time to sell it yourself online.  The car dealer is usually going to pay you AT LEAST $2000 less than the amount for which they would sell it.

Each of the 3 categories above are profit centers for the dealer, or areas in which the dealer is looking to extract as much money from you as possible. As such, it’s better than you separate all 3 of them, to lessen the chance of being ripped off, and increase your chance of understanding the so-called “deal” they are giving you. If a car dealer tries to cheat or trick you, don’t be afraid to walk out.  Their strategy is to wear you down, to make you give in to their tricks.

For more information, go here:
Tip sheets to take with you when buying a new or used car or truck.

Car dealer tricks to avoid will save you thousands of dollars, buying a new car, buying a used car, buying a car

Be sure to post about your experience in the comments below.

Most of the responses I received on Craigslist were from scammers, where the car was not even in Puerto Rico. They typically want you to send them 1/3 of the price of the car and the balance with you receive it. Over 99% of people selling a car this way, without letting you see it in person first, are scammers.

When buying a used car from an individual, not a dealer, you should go to the DTOP/DMV office with them. Be sure that before you pay or sign a contract that you ensure that any outstanding traffic tickets are paid, because such liabilities transfer over WITH the car, and you will be stuck with them. There is a revenue desk where the government official can tell you if there are any unpaid tickets, which are the responsibility of the SELLER to pay. The annual car inspection, where they pretend to test for emissions is $11. One good thing, relative to the states, is that when you buy a new or used car, there is no sales tax due when you buy it. This is because the taxes, of approximately 15%, were already paid when the car was first brought to Puerto Rico, whether it was brought in new or used. In such cases, the taxes are more of an excise tax than a sales tax.  The reason why cars/trucks are taxed 1 time when they first come to the island is because the corruption here is high.  By requiring the tax be paid when the vehicle first arrives, people cannot evade taxes on vehicles.

The banks and credit unions in PR generally do not sell repossessed cars to individuals. I called First Bank, Scotia Bank, Baxter, Jetstream and they all said they auction off their car repos to dealers.  Banco Popular is the only one I could find that sells repossessed cars.

http://www.clasificadospopular.com/en/listado/autos

If you want a user-friendly car dealer website that has a professional website, go here for Triangle Dealers:

Used car dealer website professionally managed – Triangle Dealers

Car theft and carjackings are much higher than in the states. I hope to find some numerical statistics to share with you on that. Lojack, the stolen car tracking service here charges $700 for the installation and 1 year of service. After that, they charge $25/month which is $300 per year. They claim to have a 97% recovery rate if the vehicle is stolen. However, a police officer told me the service is a waste of money because there are so many dead spots in areas where it cannot be track. There is a big discrepancy as to if this service is worthwhile or not and requires more research.  Maybe you have comments to add on Lojack?

It doesn’t make economic sense to bring a car from outside PR into PR, because the shipping costs will be $1000-1400 and the excise taxes, even on a used car, will be about $750-3000 or about 15% of the car’s value as perceived by Hacienda – the Puerto Rico tax authority.  To be clear, the import tax is NOT based necessarily on what you paid for the car.  This site is supposed to tell you the excise taxes for importing a car, but I couldn’t get it to work for cars 1999 and older, and the website didn’t give a clear explanation as to why not or a recommendation on how to make it work. Another example of bad service in PR.  Does it mean cars 1999 and older would be hit with the minimum $750 excise tax, or does it mean there is no tax on cars 1999 and older?
https://siscon.hacienda.gobierno.pr/Siscon/Portal/ARBAW951Form.aspx

These were the error messages I received:
Object reference not set to an instance of an object.
ARBAH050

MARCA/MODELO/A#O NO REGISTRADO *
Object reference not set to an instance of an object.
ARBAH050

Perhaps this was because some of the cars I test were older than for the year 2000.  If so, there should be a message in both English and Spanish explaining this instead of the useless error message.

For the year 2000, on a Toyota Camry I tested, on July 21, 2014, the excise tax was $750-$856, depending on the model.
Here is a chart breakdown

Year Excise Tax-The price varies depending on the model, such as CL, SE, LE, or XLE.
1999 or older gets an Error message with no good explanation. Does that mean its $750, or simply unpublished since most cars are not going to be that old?
2000 $750-856
2001 $887-977
2002 $1031-1168
2004 $1211-1689
2006 $1562-2130
2008 $2429-3311
2012 $4735-6165
2014 $4533-6438

This site explains why small cars do well in PR.  Old narrow streets, not many highways, so more city driving which makes fuel economy more important, lower per capita incomes.  Why do Jeeps sell so well in Puerto Rico?  The roads are far worse in Puerto Rico compared to the states with potholes.  Jeeps are known for having better suspensions and higher ground clearance.  I can’t see why a person would buy a car in PR that has low ground clearance like a Lotus, or other sports cars.  Driving into 1 big pothole is going to cause serious damage, not to mention having to go over speedbumps at a super slow speed to avoid damage.

http://www.thetruthaboutcars.com/2012/10/best-selling-cars-around-the-globe-puerto-rico-no-compre-americano

The site gives a ranking showing which cars sell best in Puerto Rico.

Puerto Rico (USA) June 2014: Hyundai Accent on podium

According to the blog, here are the top 20 cars sold in Puerto Rico in June 2014.  Notice that the Japanese and Korean makes sell well and these cars tend to be smaller and more efficient than the average car sold in the states.

Puerto Rico (USA) June 2014 – models:

Best selling rank	Model	Jun-14	%	2014	%	Best selling rank 2014 January to June	FY13
1	Toyota Corolla	667	8.4%	4,258	9.3%	1	1
2	Toyota Yaris	544	6.9%	3,233	7.1%	2	2
3	Hyundai Accent	445	5.6%	1,877	4.1%	4	3
4	Kia Rio	415	5.2%	1,495	3.3%	7	4
5	Mitsubishi Mirage	383	4.8%	2,423	5.3%	3	12
6	Nissan Sentra	305	3.9%	880	1.9%	12	6
7	Nissan Versa	258	3.3%	1,225	2.7%	9	9
8	Nissan Rogue	200	2.5%	1,538	3.4%	5	16
9	Jeep Wrangler	194	2.5%	1,277	2.8%	8	8
10	Toyota RAV4	170	2.1%	1,503	3.3%	6	5
11	Hyundai Elantra	154	1.9%	702	1.5%	14	13
12	Toyota Highlander	141	1.8%	992	2.2%	11	26
13	Ford Escape	131	1.7%	551	1.2%	22	21
14	Mitsubishi Lancer	126	1.6%	646	1.4%	17	7
15	Kia Soul	122	1.5%	757	1.7%	13	15
16	Ford F-Series	115	1.5%	607	1.3%	19	27
17	Hyundai Sonata	115	1.5%	363	0.8%	35	40
18	Ford Fiesta	113	1.4%	661	1.5%	16	14
19	Mazda CX-5	113	1.4%	458	1.0%	26	47
20	Toyota Tacoma	112	1.4%	1,050	2.3%	10	10

The police say the better selling cars, because they are more common, are at greater risk of theft.  They say this is due to having a more ready market for parts, so it’s easier for thieves to sell parts on a common model than a model that is not so common.  In addition, they say Lojack, the vehicle tracking device is a waste of money, because the tracking technology is not sufficient to track stolen vehicles.  They strongly advised not keeping any valuables in your car, especially in plain sight, and having good insurance in case of theft.  Does Puerto Rico use bait cars to catch thieves and thus reduce car theft?

Puerto Rico also has tax incentives on Hybrid and EV cars.  Read more about it here:

http://www.lowtax.net/g/news/Puerto_Rico_Gives_Hybrid_Vehicle_Excise_Tax_Exemption____57023.html