Considering buying a car in Costa Rica?

Many of our expat clients grow weary of the high costs associated with car rentals, particularly during the peak vacation seasons or when they’re spending extended periods in Costa Rica.

If you’re a foreign resident, renting might not be the best long-term solution for your transportation needs. Instead, purchasing a used car often proves to be a practical choice.

However, when you start the process of buying or selling a vehicle, you’ll quickly realize that the procedure in Costa Rica is much more complex than in the United States or other countries, filled with a variety of formalities and requirements.

To simplify this journey, we’ve outlined two critical points that every expat should be aware of to efficiently navigate the car buying and selling process in Costa Rica:

Selling or buying a car in Costa Rica: The process & costs

Here are a few things to keep in mind before you begin the process of buying a car in Costa Rica.

1. A notary public is required to buy a car in Costa Rica

Buying a car in Costa Rica is as formal and intricate as purchasing a home. Contrary to the simpler process in other countries, where transferring ownership might involve just signing a “pink slip,” acquiring a vehicle in Costa Rica is laden with formalities.

Yes, you’ve read that correctly! The process mirrors that of buying a house in its complexity and requirements.

What exactly does this entail?

For starters, the buyer must engage the services of a Public Notary. This professional will draft a formal bill of sale (deed) in Spanish, encapsulating every detail of the transaction. This includes the price, date of signing, comprehensive information and identification of both the buyer and seller, and a detailed description of the vehicle as per the Costa Rican Public Registry (CRPR). This description will cover car plates, VIN, motor number, color, brand, capacity, cylinders, traction, and any liens or encumbrances. The document will also feature legal terminology essential for the registration and transfer of ownership within the CRPR.

Should companies be involved in the transaction, the bill of sale will additionally need to outline the details of the representatives, including their powers and authorizations to buy or sell the vehicle. In Costa Rica, notaries are legally certified lawyers, recognized and regulated by the Costa Rican Attorney Bar Association and the National Notary Directorate.

These notaries bear the legal duty to advise both the buyer and seller on the implications of their agreement and ensure that the registration is correctly finalized with the Costa Rican Public Registry. It’s important to note that their fees and expenses for facilitating the registration process are the buyer’s responsibility.

2. Closing costs on buying a car in Costa Rica are calculated based on a legal schedule

One of the main things any car buyer or seller in Costa Rica must know is that the costs of buying or selling a car and their calculation is set by the Government. Closing costs for buying a car in Costa Rica are based on the higher amount of fiscal value or purchase price, as well as certain technical rules established by the Costa Rican State. Therefore, any attorney or notary should be able to provide a similar quote for completing a car purchase.

There are two major expenses when buying a car: notary fees and registration costs.

Regarding notary fees, all direct purchases of a car require the services of a Public Notary. Public Notary fees are set by a legal schedule issued periodically by public executive decree by the Costa Rican government and applies to all legal practitioners, meaning all attorneys and notaries must use it as reference and abide by the same rules when charging for their legal services.

The legal schedule contains the reference fees or minimum fees a Public Notary may charge for a specific service. Regarding registration expenses, they include transfer taxes and stamps calculated on a percentage basis of the transactional value.

The notary fees on the purchase of a car are calculated in tiers and through a progressive scale:

a) 2% – up to 11,000,000 colones;
b) 1.5% – from 11,000,001 colones to 16,500,000 colones;
c) 1.25% – from 16,500,001 colones to 33,000,000 colones;
d) 1% – Excess of 33,000,001 colones.

The registration expenses on the purchase of a car will be around 3.5% divided in the following taxes and stamps: Tax Stamps, Archive Stamps, Attorney Bar Stamps, National Registry Stamps, Agrarian Stamp, Red Cross Stamps, National Parks Stamps and Transfer Tax. All these costs must be paid to the Public Notary for completion of the process as these amounts must be transferred to the CRPR.

So, in summary, always be careful of the process of buying a car in Costa Rica as many scams happen due to lack of information and advice. Look to buy or sell vehicles with proper guidance, through a recognized salesman or dealership.

Above all, make sure you receive legal advice reviewing the title, closing costs, payment options and good standing of circulation rights, technical revision, and existence of fines and tickets, etc. If you are buying or selling a car, make sure you have the proper legal counseling. Not only would it be required for the registration of the purchase or sale, but also it is a good way to minimize bad decisions that could have been avoided.

Quatro Legal has a Compliance Department that assists expats with car acquisition and sales. Also, we have a trusted car expert that will help locate the right vehicle for you according to your budget and needs. You can learn more here.

For more information on buying a car in Costa Rica, please fill out the courtesy e-meeting form at the bottom. We will be glad to assist you!