# No U.S.-Mexico reciprocity :(



## ThomasNeumann (Nov 21, 2015)

Hello, Everyone.

You may recall my first thread to this forum not long ago, titled "*Road trip: Albuquerque, NM to ?*". (I can't post links here yet so the trailer part of the URL to that post is: 919626-road-trip-albuquerque-nm.html)

I found such helpful advice there that I want to share a related situation and see if anyone's familiar with this and, if so, what they think.

It was a month ago that I realized my older car wasn't worth the repair bills it was threatening. With that, I bit the bullet and financed a used car for 30-months. Hooray for me, right?

Well, not exactly. I've since learned that I cannot drive my car into Mexico because it's financed. The border requires any car that has a lienholder to accompany a letter from the lienholder that the car may be driven across the border.

My lienholder refuses to provide me with such a letter, even though I was able to get a quote from Sanborns for both full-coverage of the car AND 'gap' insurance.

Earlier this evening, I met with the decision-maker to discuss the matter face to face, and he told me that the problem wasn't with the insurance coverage, but with a flight-risk. He said, "If you drive to Mexico, and fall in love with the country, and decide not to return to the U.S., there are no reciprocity laws between the U.S. and Mexico. That means I have no jurisdiction to retrieve the car from Mexico should you simply stop making payments."

We talked for nearly an hour and despite a fine sense of rapport, this seems to be a decision that's written in stone. I, understandably, feel seriously disappointed because I see no way for me to pay-down the loan quickly.

So, at this point it seems that my winter trip is a no-go :rip: The idea of not being able to drive my own car into Mexico feels too much like the 'papers please!' stereotype of military border control attitudes during WWII.

I'm not the kind of person to favor a lawsuit approach to such matters so it seems to me that my only options are to 1) rent a car in Mexico for any driving I want to do that's south of the border (doable, but annoying when it's a requirement rather than an option), or 2) surrender my car back to the dealer in what's termed a 'voluntary repossession'. In the latter case, my old car is already gone and while there's no financial penalty to me, it will result in an entry on my credit record.

This seems unfair to me. The time I spent with the salesman while considering the car included conversations about me being a photography enthusiast, and about being so happy to get into a car that's reliable, etc. I know verbal chatter isn't part of the sales contract but if the salesperson had told me that I'd need a letter to cross the border, and that the dealership doesn't give letters of permission to go to Mexico, then I surely wouldn't have bought the car. Why, then, should I be 'stuck' in a financial contract from which my only relief is to agree to this voluntary repossession? That makes it sound like it's MY fault when the actual reason for me to return the car is because I was verbally misled into thinking that what I said I wanted to do with the car was a possibility? :nono:

I don't know, maybe I'm just venting here but on the off chance that this 'no reciprocity' think may help someone else, I think it deserves a separate post from my original vs. merely updating that one.

Thanks in advance to anyone who may have some thoughts to share.

Thomas


----------



## buzzbar (Feb 9, 2013)

That's really unfortunate and I can understand your frustration. A friend used the information on the site of her insurer, Bajabound, to get her letter - they go so far as to give the steps to follow for each of the ten most commonly used finance companies. Based on her experience I assumed that if you followed the correct procedure and were within the finance company's requirements then permission would be given - obviously not always. Probably not much help now, but you might want to check Bajabound's info anyway.


----------



## ExpatEmigre (Nov 22, 2015)

I'm sorry, but why would a dealership be tasked with the knowledge of what you'd have to do to drive into Mexico? He's a car dealer, not a travel agent. Also, if he's not in a border town, I'd suspect most people wouldn't know the requirements. You didn't, and you're the one planning the travel. 
Just to be clear: the vehicle is dealer-financed? The note hasn't been assigned? If anyone other than the dealership now owns the loan, it is with that entity that you have a problem, not the dealer. 

As to solutions, I have only one suggestion:
Would you be able to pay 6 months in advance on the note? If so, assuming that you would enter Mexico on a tourist card, which would be valid for a maximum of 180 days, and the import permit expiration would match the expiration of your travel document, perhaps in that situation the finance company might be willing to provide a letter limiting your permission to take the car to Mexico for no more than 180 days? Why this wouldn't eliminate entirely the risk to the finance company, it would mitigate it somewhat. It couldn't hurt to ask.


----------



## ExpatEmigre (Nov 22, 2015)

Another note: a voluntary surrender is exactly the same thing as a repossession. On your credit reports, it will show as a repossession. If there is a deficiency balance (you owe more on the loan than they recoup when they auction the car), you would remain liable for that. I understand you may have been given other information, but do not believe it. You might wish to consult the repossession laws in your state. Many states have very specific requirements a repossessing secured party must follow, or they will not be allowed to collect/attempt to collect the deficiency.


----------



## ThomasNeumann (Nov 21, 2015)

buzzbar said:


> That's really unfortunate and I can understand your frustration. ...I assumed that if you followed the correct procedure and were within the finance company's requirements then permission would be given - obviously not always. Probably not much help now, but you might want to check *Bajabound's* info anyway.


The way that the letter was casually mentioned to me, I also was led to believe that obtaining the letter was a simple administrative detail to be dealt with when a person chose to travel South. I was hoping to spend a week or two of this holiday season in Mexico but that seems near impossible at this point. In any case, thanks for the link, buzzbar; I'll check it out.





ExpatEmigre said:


> I'm sorry, but why would a dealership be tasked with the knowledge of what you'd have to do to drive into Mexico? He's a car dealer, not a travel agent. Also, if he's not in a border town, I'd suspect most people wouldn't know the requirements. You didn't, and you're the one planning the travel.


I suppose (just speculating here) that their experience with prior loss has shaped their disposition about granting permission. During our hour-long conversation, he told me that their stance in this matter wasn't because of me personally, but from the many people before me whom they've financed in-house and have skipped-out across the border.

While understandable, I'd think that their predisposition *not* to grant a letter would need to be _stipulated within their contracts_ in order to be a lawfully upheld decision.



ExpatEmigre said:


> Just to be clear: the vehicle is dealer-financed? The note hasn't been assigned? If anyone other than the dealership now owns the loan, it is with that entity that you have a problem, not the dealer.


Yes, dealer financed.



ExpatEmigre said:


> As to solutions, I have only one suggestion:
> Would you be able to pay 6 months in advance on the note? If so, assuming that you would enter Mexico on a tourist card, which would be valid for a maximum of 180 days, and the import permit expiration would match the expiration of your travel document, perhaps in that situation the finance company might be willing to provide a letter limiting your permission to take the car to Mexico for no more than 180 days? Why this wouldn't eliminate entirely the risk to the finance company, it would mitigate it somewhat. It couldn't hurt to ask.


I'm unable to prepay any amount, Expat. I live month-to-month. Fixed income. No additional savings or assets to offer them as collateral. Nice thought, but not a possibility in my world. I suspect even if it was a possibility for me, though, it does nothing to mitigate their risk along the line of jurisdiction. The guy I talked with was pretty emphatic on that point: if I'm across the border and I stop paying them, then they have no recourse to retrieve their property.

On a related note, when I first moved to NM 6-years ago, I found an apartment that I fell in love with. At that time, I was sitting on some cash and when the apartment denied me on the basis of income threshold (I was making roughly $30 USD less per month than their income requirements dictated). I offered to pay them for an _entire year_, up front, on a year-long lease. That's how much I wanted that apartment. But, they declined my offer. I attempted to reason with them that their income requirements were supposed to mitigate their risk of lost revenue due to financial overburden, and that by me paying _in full, up front_, that their loss dropped to zero. They stood their ground and denied my residence based on their income requirements. Some days, the seemingly widespread unwillingness of some people to engage with others on a human level (vs. on a rule-based level) boggles my mind. For all the risk mitigation and business efficiency that the automation of a rule-based transaction may secure, it seems that it does so -- at least sometimes -- at the expense of our humanity.



ExpatEmigre said:


> Another note: a voluntary surrender is exactly the same thing as a repossession. On your credit reports, it will show as a repossession. If there is a deficiency balance (you owe more on the loan than they recoup when they auction the car), you would remain liable for that. I understand you may have been given other information, but do not believe it. You might wish to consult the repossession laws in your state. Many states have very specific requirements a repossessing secured party must follow, or they will not be allowed to collect/attempt to collect the deficiency.


I faxed the details of last night's meeting to my attorney. Here's hoping for a mutually satisfying and speedy resolution of the matter.


----------



## RVGRINGO (May 16, 2007)

Another consideration is that temporary importation of a vehicle into Mexico does require that you agree to remove that vehicle from the country. So, what would you do if you had an accident in Mexico and could not drive the car out? Would you ship it to the USA? 
Another complication is that you cannot extend your tourist permit or car importada beyond the 180 day limit without departing from Mexico, with the car, before the 180 days expire.
Basically, you cannot import someone else‘s property; which is the car, until it is paid for.
True; the laws are fuzzy and some folks have gone around them, but without significant resources, and/or qualifying financially for a residence permit, permanent or temporary, you are at a disadvantage. Perhaps you could sell your car, pay the note and start over again by bus, or a car you can afford.


----------



## ThomasNeumann (Nov 21, 2015)

RVGRINGO said:


> Another consideration is that temporary importation of a vehicle into Mexico does require that you agree to remove that vehicle from the country. So, what would you do if you had an accident in Mexico and could not drive the car out? Would you ship it to the USA?


I hadn't considered what might happen if I couldn't bring the car back out. Here's something I just found that I think answers that question:



> *What Happens if Your Foreign Plated Car is Stolen? … …. SURPRISE ! @#%&***!!*
> 
> If your foreign plated car is stolen in Mexico, you owe Aduana a 40% tax (as the Import tax) for not being able to take the car out of Mexico, as you agreed-to when you got your Temporary Import permit. Aduana instituted this fee because past expats would dump their foreign plated cars that they did not want to take back to the border, and then claim that “My car was stolen.” to get around the Aduana requirements.
> 
> ...


I also found information about both theft and total-loss situations here:

Total loss: (point #5 in the list)
Mexico Auto Insurance Claim Procedures

Theft:
Vehicle Theft In Mexico, Mexican Auto Insurance

Good to know. Thanks for asking!


----------



## stanburn (Jan 19, 2009)

Don't need a carin Mexico. Enter the country by flying, bus or walk across. Then use buses and taxis for your travel. You get to enjoy more, relax more and it will be cheaper than operating the car.

For example, to travel by bus from Manzanillo to Guadalajara it costs from 420 to 485 pesos on a first-class bus. The tolls are 465 pesos and you still have to pay for gas if you drive plus wear and tear on your car.

My advice, ditch the car, having a car is a US mentality. Over half of the population here don't have cars.


----------



## lagoloo (Apr 12, 2011)

stanburn said:


> Don't need a carin Mexico. Enter the country by flying, bus or walk across. Then use buses and taxis for your travel. You get to enjoy more, relax more and it will be cheaper than operating the car.
> 
> For example, to travel by bus from Manzanillo to Guadalajara it costs from 420 to 485 pesos on a first-class bus. The tolls are 465 pesos and you still have to pay for gas if you drive plus wear and tear on your car.
> 
> My advice, ditch the car, having a car is a US mentality. Over half of the population here don't have cars.


Bus service in Mexico is a whole different world than it is in the U.S. In towns like Chapala and Ajijic, there are so many buses that if you miss one, the wait for the next one is short. There are also long distance "luxury" buses which are comfortable, air conditioned and with clean restrooms for a reasonable price. 
We also have a lot of taxis, fairly reasonable. So, forget about needing your car to visit Mexico.

But, if you fall in love with Mexico and want to move here, you'll eventually need to buy a Mexican plated car anyway. 
lane:


----------



## stanburn (Jan 19, 2009)

I will repeat my opinion. There is no need for a car in Mexico. 11 years here full-time and I don't have one.


----------



## lagoloo (Apr 12, 2011)

stanburn said:


> I will repeat my opinion. There is no need for a car in Mexico. 11 years here full-time and I don't have one.


We did buy a new car in Mexico five years ago (small, very basic) We put about 2500 miles on it per year tooling around the area for errands, plus one trip to the beach.
Can't use the bus on a regular basis due to mobility problems on that first step up. Have taken a number of excursions to various parts of Mexico (Lion's club and local charity organized) in those luxury buses and they were very comfortable. Beats Greyhound to pieces any day. Mexican buses get cleaned.


----------



## TundraGreen (Jul 15, 2010)

lagoloo said:


> Bus service in Mexico is a whole different world than it is in the U.S. In towns like Chapala and Ajijic, there are so many buses that if you miss one, the wait for the next one is short. There are also long distance "luxury" buses which are comfortable, air conditioned and with clean restrooms for a reasonable price.
> We also have a lot of taxis, fairly reasonable. So, forget about needing your car to visit Mexico.
> 
> But, if you fall in love with Mexico and want to move here, you'll eventually need to buy a Mexican plated car anyway.
> lane:


I agree with all of your post up to the last statement. I have been here 8 years and haven't yet seen the need for a car. The need for a car depends on several things.The most important two are choice of living situation and family circumstances. If you choose to live in a suburban environment far from bus routes, and sources for groceries, haircuts and everyday needs, then a car is going to be necessary. If you live in a village or an urban center (like a village) where mercados and other services are within a short walk then you can get along fine without a car. The other situation that might drive the need for a car is family circumstances. If you have kids that have to go to school, after school activities, etc, and several family members working in different locations, then a car might become a necessity. A retired individual or couple has more options in their choice of living arrangements and can easily do without a car in Mexico.

The original poster in this thread expressed interest in exploring Mexico by car. As someone pointed out, you can explore Mexico without a car. It takes a little more time but you see a lot more. Intercity buses are cheap, frequent and comfortable. In local areas there are combis (12 or 15 passenger vans), or taxis to get around.


----------



## ThomasNeumann (Nov 21, 2015)

stanburn said:


> Don't need a carin Mexico. Enter the country by flying, bus or walk across. Then use buses and taxis for your travel. You get to enjoy more, relax more and it will be cheaper than operating the car.
> 
> For example, to travel by bus from Manzanillo to Guadalajara it costs from 420 to 485 pesos on a first-class bus. The tolls are 465 pesos and you still have to pay for gas if you drive plus wear and tear on your car.
> 
> My advice, ditch the car, having a car is a US mentality. Over half of the population here don't have cars.


You make a fair point and I'm inclined to agree that a car is optional in terms of day-to-day living. I mean to explore Mexico a bit. For that, it seems to me that my own car is the only practical way to explore -- especially since I'll be exploring with my beagle-sized dog.


----------



## RVGRINGO (May 16, 2007)

The dog is the crucial difference, as it cannot board a bus, enter a restaurant or store, etc. It is not easy to travel in Mexico with a pet, as Mexicans just don‘t generally do that. “No Mascotas“ signs are fairly common and there are health laws against them in restaurants. Few hotels will accept pets.


----------



## lagoloo (Apr 12, 2011)

The pet will also be a deal-breaker re many rentals.


----------



## Isla Verde (Oct 19, 2011)

TundraGreen said:


> I agree with all of your post up to the last statement. I have been here 8 years and haven't yet seen the need for a car. The need for a car depends on several things.


You forgot to mention that not everyone can drive. I am one of those odd people who doesn't have a driver's license. I haven't driven a car since 1970 and have no desire to relearn a skill I never enjoyed practicing in the first place!


----------



## lagoloo (Apr 12, 2011)

Isla Verde said:


> You forgot to mention that not everyone can drive. I am one of those odd people who doesn't have a driver's license. I haven't driven a car since 1970 and have no desire to relearn a skill I never enjoyed practicing in the first place!


My statement about "your will probably need to buy a Mexican car anyway" was somewhat misinterpreted. To clarify: IF you decide to live in Mexico AND you feel you need a car.......etc. in other words, his U.S. plated car isn't going to do him any good no matter how it turns out.

If you can use public transportation, you're better off financially by skipping car ownership.
The pet issue pretty much precludes doing that, aside from other considerations.

:juggle:


----------



## ojosazules11 (Nov 3, 2013)

RVGRINGO said:


> The dog is the crucial difference, as it cannot board a bus, enter a restaurant or store, etc. It is not easy to travel in Mexico with a pet, as Mexicans just don‘t generally do that. “No Mascotas“ signs are fairly common and there are health laws against them in restaurants. Few hotels will accept pets.


If the dog is small enough it can go in a carrier under the bus with the luggage. But I know a lot of people probably wouldn't want to have their dog travel that way.


----------



## ThomasNeumann (Nov 21, 2015)

RVGRINGO said:


> The dog is the crucial difference, as it cannot board a bus, enter a restaurant or store, etc. It is not easy to travel in Mexico with a pet, as Mexicans just don‘t generally do that. “No Mascotas“ signs are fairly common and there are health laws against them in restaurants. Few hotels will accept pets.


I imagine, RVGRINGO, that it's not easy to travel _anywhere_ with a pet  The same kinds of limitations apply here in the U.S.





lagoloo said:


> The pet will also be a deal-breaker re many rentals.


Yep, pets are also a deal-breaker for some rentals here in the U.S.





lagoloo said:


> ...in other words, his U.S. plated car isn't going to do him any good no matter how it turns out.
> 
> If you can use public transportation, you're better off financially by skipping car ownership.
> The pet issue pretty much precludes doing that, aside from other considerations


For traveling, and given my pet, using my own car is the only practical solution.

If I was going to move to Mexico, I would prefer to have 'a' car, whether it comes from the U.S. or is purchased in Mexico. I don't take my pet everywhere so nothing keeping me from doing both: take public transportaion for errands and simple outings, and still have a car for when I want to get out and explore even more of the country.





ojosazules11 said:


> If the dog is small enough it can go in a carrier under the bus with the luggage. But I know a lot of people probably wouldn't want to have their dog travel that way.


I would never put my dog in a luggage compartment, and I'd have nothing kind to say to people who would. Just sayin' :boxing:


----------

