Cars are really expensive right now and finding the best deal is always a priority. A lot of cars are made in Mexico and the exchange rate is favorable to us, so cars must be cheaper right?
Turns out that certain brands and particular models can really be found cheaper in Mexico. This is highly dependent on spec and features but yes, the purchase price, when converted to $USD indeed, is cheaper in some cases. For most people buying and importing a car will most likely negate all the savings you get, though it just may work for you if you find the right car.
We’ll break it down in detail using some specific examples of how this works out and whether or not it’s actually worth it to pursue a car across the border.
Car Prices In Mexico
Prices in Mexico can vary wildly. The real key is finding the car and spec you want exactly before doing any cost analysis. Every car isn’t apples to apples. Manufacturers release different specifications and trim levels for different regions. So in Mexico, you might find the same car, but its base price might be much higher since it may be equipped with more features.
Also for the sake of this article, we’re discussing only new vehicles. Used Vehicles are highly dependent on age, mileage, condition, features and are almost impossible to compare directly at scale.
A used car price is what you’re willing to pay for it, negotiation is a big factor in the price you pay. Comparing new MSRP car prices makes it much easier to gauge pricing structures.
New Car Price in Mexico
So the chart above represents a sample of new vehicle prices. We chose six of the most popular selling vehicles on the market today to compare how the prices stack up in the two countries.
As you can see everything aside from Toyota and Honda is more expensive in Mexico than in the United States. The Toyota Camry is about 7% less expensive in Mexico, and the Toyota Rav4 is almost 9% less expensive! That’s a pretty significant saving. The Honda CRV touring comes in at 4.9% less expensive. So it goes to show, you really can find cars cheaper in Mexico.
However, if you look at the rest of the chart it shows the opposite. The base model Ford F150 is more than $6k less expensive in the U.S and the base Tesla Model 3 is more than $7.5K less expensive! The Jeep Grand Cherokee L is only offered in the highest trim but still costs almost $10k more in Mexico.
So what’s going on here?
Different Market Different Target
It’s simple really. Mexicans and Americans just buy different types of cars. If you search for the class of vehicles that the majority of Mexicans purchase you’ll see that they are all compact and subcompact vehicles.
The Nissan Versa is one of the best-selling cars in Mexico. Compared with the US, our best-selling vehicles are pickup trucks followed closely by crossover and SUVs.
So it would make sense that the Ford 150, Tesla Model 3, and Jeep Grand Cherokee L cost significantly more in a market where they would sell less of them. These brands sell way more of these vehicles in the United States and as expected they end up being the most cost-efficient there.
So why are Toyotas and Hondas cheaper in Mexico? There is no obvious answer to this, especially since both Toyotas and the Honda CRV are built in the United States.
This is speculation but, it may just be that these companies are willing to take a lower profit in order to gain market share.
Every manufacturer has cars specific to the Mexican market that isn’t available here. Those vehicle sales might be enough to offset a lower profit margin on the other lower selling vehicles.
The bright spot is that these cars prove that you really can find certain vehicles for less money in Mexico than you can in the United States. Finding a car cheaper is only half the battle though, bringing it back to the US and having it legally on the road; those costs will prove if it is worth pursuing a car across the border.
Can You Buy A Car In Mexico And Bring It To The USA?
Bringing a car across the border isn’t as simple as just driving it across. Like almost everything else in the world, there are procedures, rules, and paperwork we all need to follow. Getting these things right is critical to actually being able to use your vehicle in the U.S.
Laws and Regulations
If you read our article on how to import a from japan the right way then you know there are two kinds of vehicles you can legally import to the USA without being in red tape for an eternity.
The first kind of vehicle is one that is 25 years or older. If your car fits into this category, it’s a fairly straightforward process, filling out paperwork, paying customs and fees, and registering. The 25-year rule has no limitations on the type of vehicle you can import, even if it was never sold in the United States originally.
The second kind of vehicle is one that is currently sold in the U.S. According to the U.S. Customs and Patrol website, there are a few steps you need to take in order to legally import your vehicle from Mexico.
Clean your car, specifically the undercarriage
All vehicles coming into the U.S will be inspected and must be free of foreign soil. This is to prevent any kind of non-native species from entering our country and potentially harming ecosystems. The undercarriage is the place most likely to gather foreign soil so make sure that’s clean.
Don’t use your car as a container for personal belongings
Everything must be declared at the border so just don’t put anything in your car that doesn’t belong there. It’s subject to search and seizure especially if they find anything illegal.
If you’re shipping your car across the border, transporters may not accept your vehicle if it has personal belongings and it’s more susceptible to theft.
New or used, personal use or for sale the duty on vehicles breaks down as follows:
- Autos 2.5%
- Trucks 25%
- Motorcycles free or 2.4%
Duty is placed on the price paid or payable. If you’re a returning United States citizen, the customs and border patrol allows up to $800 worth of goods to be imported duty-free and you can apply that value toward your vehicle under certain circumstances. Those being that the vehicle accompanies you on your return home (i.e you drive it), it’s for personal use and was acquired during the journey you are returning from.
Travel, work and study abroad count as returning U.S citizens. If you use the $800 exemption, a flat 3% is charged on the next $1000 worth of value, then the regular rate on the remaining value.
There are some conditions under which cars can be imported without duty. Those are particular instances where if you are an ex-pat working abroad, or a military veteran who was based across the border. If these circumstances are applicable to you be sure to read theU.S. Customs and Patrol website.
Depending on where you live in the United States and where you buy your car in Mexico, the cost will be very different. If you’re close to the border it may only be a couple thousand or less, but if you live up in the northernmost states you can expect to pay multiple thousands.
Once you’ve gotten your car across the border officially you have to register it in your state officially like any other car, this is when you’ll pay tax on your car based on its value or what you paid for it. So if you live in a high tax state, like say here in New York, this could easily be another couple thousand dollars.
Every state has its own tax rates and fees that apply upon registration so be sure to check your DMV‘s website to get an accurate estimate of your costs.
Should You Buy A Car In Mexico?
The short answer is maybe. If we take the Toyota RaV4, which was 9% less expensive in Mexico, as an example we can run the numbers to see if it’s worth it.
If we take the purchase price of $24,143 and add the 2.5% duty we get a price of $24,746. That’s still significantly cheaper than the U.S price of $26,525.
If you don’t live too far from the border and don’t have to ship your vehicle that could be worth the savings. If you have to take a flight and book a hotel maybe not so much.
So there you go, you really can find cars (some) cheaper in Mexico. The devil is in the details though so be aware; do your research and run the numbers.
If your situation works where you can drive down across the border pick up a car for significantly less including duties and travel then I’d say yea go for it. Heck, you can make a vacation out of it, what’s better than a car as a souvenir?