By DON WINNER for - People who are moving to Panama, particularly from the United States, often come up on the Americans in Panama Yahoo email group and ask "should I bring my car with me to Panama or should I sell it here and buy something there?" Many people, and I mean thousands of people, have already faced this same decision. And, the great majority have figured it out - it makes much more sense to sell whatever vehicles you own in the United States, "ship" the money in your back pocket when you fly down, and then buy something here, new or used, once you arrive. There are all kinds of good reasons for doing it this way. Here are a few;
Example Vehicle: Let's say you're driving a 2002 Chevy Suburban 1500 4x4 SUV with an 8 cylinder engine and about 65,000 miles in pretty good condition. That car has a Kelly Blue Book value of about $10,000 dollars. And, let's say you live in Wisconsin and you're going to retire and move to Panama. I will be using this vehicle for the example, but the same principles apply to practically all.

Shipping Cost: First things first. You will have to make arrangements to have your car shipped from Wisconsin to Panama on a boat. Of course there are companies who do this and it's not cheap. I don't know what the exact cost would be to ship this vehicle from point to point, but it's probably in the neighborhood of $2,000 dollars or so.

Import Taxes: When you car gets to Panama you will have to pay 18% importation duty plus another 7% ITBMS, based on the value of the vehicle. So there's another $1,800 in duty and $700 in ITBMS. You're already up to $4,500 dollars in combined shipping, import taxes, and sales tax - which is practically 50% of the value of the vehicle.

Bribes At The Dock: You're going to end up paying bribes and fees one way or the other to get your vehicle into Panama. There is a "customs agent" - the guy who runs your paperwork through the system and gets all of the right stamps. At the docks those government officials are under no pressure to move your paperwork quickly, so if you want to see your vehicle any time this century they are standing around with their hands out, waiting for a bribe to "hurry things up." You don't have to pay these little $20 and $40 bribes, but if you don't you can expect you car to come off of the lot dead last. So, at this step you can add a few hundred more dollars in fees and bribes.

Bug Spray To Screw Up Your Paint Job: Somebody just posted this morning that their car was sprayed at the docks, supposedly for potential insect infestation, even though it had already been sitting at the docks for more than two months. He wrote: "I thought the same thing. But after the car sitting 2 months in Colon, finding all the hidden costs someone could dream up. Pay this guy, pay that guy, Oh and better pay this guy over here. Then when I go to leave the port there in Colon and some guy wants to spray this crap all over my car to kill what ever I might have brought into the country after it had been sitting in a lot for 2 months. Totally ruined a really good original paint job. If you got plenty of time and money is no object then go for it. If these cars are something you cherish, I wouldn't do it. I tried to buy off the guy spraying what ever they spray on the car but he wouldn't do it. From the smile on his face I think he enjoyed it. I think the only reason it didn't eat the paint off the car was that it started raining on the way back to PC and washed it off."

Your Suburban Is Too Big for Panama: In the United States there are big, wide open highways with lots of parking in front of the Walmart and it's easy to drive a huge Suburban all over the place with little additional concern. Here in Panama the streets are more narrow, lanes are tighter, and parking in often nonexistent. Vehicles that are nice and practical in the United States are absolute nightmares in Panama. And that not only applies to cars that are too big. The roads are full of potholes so small little sports cars that run low to the road are just as impractical. Also, no one owns convertibles down here because any moron with a switchblade can open it up in a second. Take a hard look at the vehicle you're thinking about shipping down, and ask yourself it that might be a practical vehicle for Panamanian streets and byways.

Parts and Pieces: Here in Panama Japanese cars dominate the market. There are by far many more Toyota and Nissan vehicles running around than any other, followed by Mitsubishi and Hyundai. American cars carry a very small percentage of the market. Therefore, parts and replacement pieces are much harder to come by. The other thing to think about is "American Specifications." You might be driving a vehicle that looks the same on the outside, but if you bought it in the United States then there are going to be additional things, especially for safety, impact, fuel economy, and emissions. The Toyota you buy in Panama is different than the Toyota you buy in Wisconsin.

Experienced Mechanics: All cars need repairs sooner or later. Since most of the vehicles here are made in Japan (or elsewhere in Asia) that means the bulk of the mechanics know the most about working on those kinds of vehicles. If you have something thats made in the US or exotic in any way, you will have a much smaller pool of available mechanics to choose from. And, God forbid you should be forced to pull into the dealer to get your car fixed, because then the prices double or triple.

You're Gonna Get "Dinged" The chances that you will become involved in a some kind of a minor fender-bender while here are practically 100% - sooner or later. Low speed contact accidents are very common, mostly in intersections and during lane changes in heavy traffic. Both drivers thought they could duck into that open space and they arrived in the middle, that sort of stuff. The drivers here tend to be very aggressive in traffic and minor accidents are common.

Gas Guzzler: Your Suburban V8 sucks down a whole lot of gas. It's not so bad when you're flying down the highways and byways of the great United States at 75 miles per hour, but in Panama you're going to be sitting in a traffic jam, going nowhere, and burning up mucho dinero in stop and go traffic.

Low Resale Value: For all of those reasons, nobody here in Panama will want to buy your huge American car once you finally figure out that you screwed up when you brought it down here in the first place. You'll end up selling it for much less than what you could have gotten if you had sold it in the United States before you left.
If It's About the Money: Since it's going to cost you more than $15,000 to import your Suburban that's only worth $10,000 doesn't it make more sense to sell your vehicle in the United States, and then spend the same amount of money to buy something nice down here? Something that's a little smaller physically so it's easier to drive and park in Panama, smaller more practical engine that burns less gas, maybe not so new so if it gets dinged then who cares, made in Japan so the parts and mechanics are available. Thousands of members of the community of English speaking expatriates agree - bringing a car with you doesn't make any sense from a strictly economical point of view. If it's about the money, sell it there and buy down here. We've already got this one figured out for you.

I Love My Car: If you're driving the love of your life then it might be worth it for emotional reasons. Let's say you got that '69 Impala you drove while you were in high school and you've spent ten years to have it rebuild and restored. If the situation is something like this, then all bets are off. Pay the money, pay the bribes, and be willing to order the parts and pieces from eBay. Good luck.

What I'm Driving: I drive a 15 year old Jeep that's probably worth less than $2,000 if I ever tried to sell it in this market. It still looks pretty good inside and out (I've had it painted) and it runs well (thanks to Alvaro and Campos, my mechanics). If something breaks I get it fixed. It's been dinged on all corners a little bit here and there, but if I swap paint with a taxi we both just say "I don't have time to wait for the traffic cops" and we go our separate ways. I have a huge steel bumper guard (slash) tow hitch welded to the frame on the back which has absorbed what would have been a couple of read-enders. It's an SUV and the high clearance is good for driving over curbs and pulling illegal u-turns to avoid demonstrations in Transistmica, or driving through deeply flooded streets during the rainy season. In other words, think "Mad Max" - it gets me around in this environment. And, I bought it here, used, more than ten years ago.

The Uncommon Exception: This most recent discussion on the Americans in Panama Yahoo email group was started by "Dave." It turns out he's a master mechanic who will be importing six cars, as well as the tools and equipment to maintain them, paint them, and keep them looking sharp. He also has modified the vehicles with over sized and wide tires, raised bodies, and upgraded suspensions. His personal garage can hold "six cars, and one on the lift." Obviously, if you're this guy you know what you're doing and can fix anything. Hey Dave, do you work on Jeeps?

Tell Us Your Story: Please post your comments to this article below. Let others know what you've done, what happened to you, do you agree or disagree, or have I left anything out or forgotten anything. Please and by all means, fill in the blanks. Thanks, and welcome to Panama. You're going to love it here.

Copyright 2010 by Don Winner for Go ahead and use whatever you like as long as you credit the source. Salud.   

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Great Article by Don Winner on the subject

doesn't seem true, here is the link to the embassy website.

Carl, some taxes are exempted, others aren't. Also, the vehicle evaluation process is arbitrary and often incorrect. In any case, you now need to have your permanent Pensionado status before the importation or there will be no exemption. Afterwards, there is the inspection and Registration process to deal with at several levels of government. When all is said and done, you have a North American car in a foreign country that has a lower resale value than a vehicle that is built for this market, together with less opportunity for parts and service. No website.


I assume you are speaking of "used" vehicles as concerns "arbitrary" valuations. It is true that for what ever model you have of a car, the highest valued version of that car will be selected to apply taxes to. The other is that the Aduana here in Chiriqui is much better about this than the Aduana in Colon (worst) or Panama City. 

Also this is very much affected by the "aduanero" you use. A good one is the key to correct valuation. 

I assume you're referring to the following statement: "Tax exemption to import a new car every two years." Notice that it says "a new car," and that means brand new. You still have to pay shipping, so why not buy that brand new car in Panama with specifications that the mechanics are familiar with?

The best reasons for a USA car, are safety standards and availability of factory parts long term.

Till a local bus or truck tags you. Or you roll the vehicle one foggy night coming up the Boquete/David road in the well designed drainage systems. Nice to have 8 airbags surrounding you. 

Everyone just do yourself a BIG favor and get your car from Keith.   Those of us who didn't... lesson learned.


do you have a website?

By the way, the above article was authored by Don Winner in 2010. Vehicle importation has only gotten tougher and more expensive since then as new minimum taxes based on the age of the car have been implemented in order to gradually upgrade the general age and quality of vehicles on the road.

Keith can you tell me where to find them?  And how long you have to change it if you drive it down.  I am guessing that it would be right away if you have a pan drivers lic?  Thanks

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