Buying a Vehicle in Nicaragua
August 2022 Note:
The use of corporations for property, residency and therefore vehicle is changing. I’ll update those articles soon. The information below related to corporations is subject to change as current government regulations on corporations are changing.
Thinking about buying a vehicle in Nicaragua as a foreigner? Here are the things to consider first.
Legal Aspects
Let's start with the legalities of purchasing a vehicle in Nicaragua. Owning and registering a car here are two different things. Purchasing as a foreigner is easy.
A lawyer can write up a contract in an hour transferring possession from the seller to yourself. They provide the prior deed, along with the new one, stating you are the owner of the vehicle. Boom, you are immediately the legal owner of said vehicle.
Getting a circulaccion (registration card) and a seguro (insurance), however, requires a cedula (identification card) or the use of a Nicaraguan corporation.
The cedula card is an ID issued by the Nicaragua government that looks like a drivers license. In order to get a cedula you must be a resident or citizen of Nicaragua.
Acquiring residency takes between six and twelve months, and costs about $1200. I help my real estate clients with that. And if you want help, but aren’t a real estate client, we can still help. Check out our consulting page for more on that.
Once you have your cedula card it’s a simple process to purchase the vehicle and have a lawyer register it in your name. I’ve got great legal contacts all over the country. Again that part of what we provide with consulting.
Assuming you don't yet have residency, or don't want to acquire it yet, how do you go about purchasing a vehicle in Nicaragua? The next option is to open or buy an existing Nicaraguan corporation and and then purchase the vehicle under that corporate structure.
A corporation is a legal, fictitious person with the same rights as a human being. Here in Nicaragua after you register a corporation you get a RUC number. That number acts like an ID number for a person.
With that RUC number you can purchase, register, and insure the vehicle. In this scenario you would own the corporation, and the corporation owns the vehicle. Voila it’s yours and can be registered and insured.
It also provides one extra layer of liability protection in the even of accidents, so for most people I recommend it.
Transfer taxes
One thing to note is that you (or your lawyer) need to make sure the taxes on the vehicle are up to date. If the previous owners have not paid the fee to get the registration updated, there may be hidden costs involved.
Let me explain.
There are transfer taxes have to be paid each time a vehicle is sold. If a a vehicle was sold previously, and not properly re-registered, you might have to pay extra taxes.
For example: Person A buys a new car from a dealership. Later he sells it to Person B, who then again sells it to person C. During this entire time the seguro (insurance) and circulaccion (registration) cards were still in the name of Person A. Which is fairly common.
You then decide to buy this used vehicle from Person C. If you want to have the vehicle registered in your name, or that of your corporation, you have to pay the taxes to transfer the vehicle from Person A to B, person B to C, and from C to you. Those can end up being over a thousand dollars depending on the assessed value of the car.
So - make sure they are paid up or negotiate the price to reflect the fact there are additional taxes coming.
Alternatively if you are lucky enough to track down Person A and get them to sign a contract transferring the vehicle to you (without mention of B or C) the taxes would be much lower. This is where a good lawyer is worth their fee.
Insurance
Once it is registered there are a number of companies that offer vehicle insurance in Nicaragua. Lafise Bank, BAC Bank, and Seguros America are the three most popular options.
Basic “Third Party Property Damage” insurance starts around $70 - $150 per year depending on the vehicle. That does sound crazy low, and it is, but doesn’t cover much at all.
Full coverage, including at-fault accidents and repairs to the insured vehicle, will probably actually be more expensive that the same coverage in in the United States. So you need to weigh the risk and the cost and decide what is best for you.
Labor is cheap here and parts are moderately priced. So if your vehicle is not brand new it might make sense just to get the basic insurance and pay anything else out of pocket. If you’re in the Pacific coastal region of Nicaragua I have a an excellent mechanic who is honest, punctual, and fixes things right the first time.
Where to Shop
The best site for shopping for vehicles in Nicaragua is www.Encuentra24.com. In addition there are good buy-and-sell facebook groups online like Se Vende Carros en Nicaragua and Se Vende Carros en Nicaragua Publique de Venta
There can be some unethical people selling cars online. Like any country.
So you definitely want to be careful. Make sure to get a mechanical inspection.
If you happen to be a real estate client of mine and have bought a property and/or a corporation I can help with this. Even if you’re not I can hook you up with an employee of mine who will help you buy the best vehicle, at the best price.
We do that as part of our consulting services.
Which Vehicles are the Best for Nicaragua?
The Toyota Hilux is the best, followed by the Nissan Frontier / Navara
If you’re looking at a vehicle more than a few years old you’re going to want Toyota or Nissan. Parts are more plentiful and mechanics know how to fix them. Also if you’re further away from Managua there might not be any parts in stock locally for your car. If you need something fixed you might have to wait for days to get them in.
We are lucky here in that many more of the vehicles in Nicaragua have diesel as opposed to gas engines. I would reccomend diesel if possible, as your fuel economy will be excellent and the motor will last forever. Diesel is usually 10-15% cheaper per litre than gasoline here.
If you’re looking for a 4x4 truck the Toyota Hilux is the best, followed by the Nissan Frontier / Navara.
For SUV’s the Toyota Land Cruiser Prado is a great mid size, along with the Fortuner which is an SUV based on the Hilux platform.
The Toyota Land Cruiser is larger, bulletproof in term of reliability, and comes in both SUV and pick up formats. It’s pricey but a great vehicle.
For cars the only ones I would recommend here are Toyotas - the Corolla and the Camry.
If you get a brand new vehicle from any other car maker you’re probably OK. You’re not likely to have many issues with a new ride. But you might want to sell if before it gets more than a few years old.
I hope that was helpful! If you’re looking for property check out our real estate page. Or more articles check out the rest of the blog.
Happy shopping!
Joel Stott-Jess
Cell / WhatsApp: (+505) 8176 8624
Skype: joelstottjess
Joel Stott-Jess is a New York Times featured agent / broker in San Juan Del Sur.
Originally from Alberta, Canada he has been doing business in Nicaragua since 2014.
An investment consultant, serial entrepreneur, surfer, and outdoor enthusiast he is an expert on the real estate and business markets in Nicaragua. He also operates The Central Investor, a real estate and investment blog focused on the entire Central American region.
Thanks to his lovely Nicaraguan wife, a medical doctor, he is also well informed on health care services in the country.
Draft ….