This post has 2 sections:
Our Experience Buying A Car In Panama
7 Steps You Should Follow To Buy A Used Car in Panama
With vital tidbits along the way, like
- What Is the Best Car to Buy in Panama
- Where & When Should You Purchase Your Car
Our Experience — Why A New Used Car
Over the last 8 years, our family has always gotten by with our truck. A 1999 Mitsubishi L-200 four door pickup truck.
The truck has proven to be a reliable work truck. I call it my burro. It has also been “just bearable” for our trips to David, Panama City, and Bocas del Toro.
However, as the truck has aged, it has become less and less “bearable” for longer trips. Also my wife needed another car so she didn’t feel trapped at home. I often take the truck to work on projects and to surf.
Because of this and that, I am often gone much longer than I predicted. To keep our
marriage a happy one, it was clear we needed to buy another car.
Our Prior Experience Buying A Car In Panama
We wanted to buy a used car. We had purchased our truck used and it worked out well.
We bought if from a guy in David, Panama who sold cars from out of his front yard. That was 8 years ago. He is still there, so is his house, but his front yard has grown into an official used car lot. I’m glad he is doing well, but…
We Avoid Used Car Salesmen
This time we wanted to cut out the middleman and buy directly from the car owner.
We did this so we could get 2 things
- The Car’s Maintenance Records
- A Better Price
Like other places, in Panama, the sales price of a car is lower if you buy directly from an owner, rather than a car dealer.
We also wanted to find out how, and if, the car had been well maintained. It is much harder to get a full history of a car from a dealer – especially a story you can trust.
Review of Prior Maintenance Is Critical
How well a car has been maintained is a critical consideration in Panama.
Cars are often not well maintained here. It is very common to find shoddy repair work, oil not changed regularly, and the like.
Many cars on the road in Panama are owned by first time car owners. Often no one in the family has ever owned a car before. They may not even know you need change the oil – ever.
How To Decide What Car To Buy
Ease & Cost of Repairs
Look around. See what cars you see on the road in Panama.
Notice the ones you see alot of. Those are the cars that local mechanics know how to fix. Those are the cars with easy to find parts.
Most Popular Cars In Panama
The 3 best selling car brands in Panama (2013)
The 3 most popular model
- Toyota Hilux
- Hyundai Accent
- Toyota Rav4
(Thanks to Matt at bestsellingcarsblog.com for that information)
Mitsubishi, Nissan, and Suzuki cars & trucks are also commonly seen on the road in Panama.
If you decide to bring your car to Panama, make sure it isn’t going to be a maintenance nightmare with no one who knows how to fix your car or where to get the parts.
Our Car Decision
We decided on the car we wanted before we started searching the classifieds. This made the whole car buying experience much easier and less time consuming.
We wanted a 2011 or 2012 Toyota RAV4 with under 50K kilometers.
Toyota is very popular and highly valued brand in Panama. Which means the car also has a good resale value. The Toyota RAV4 has great reviews and it is the right size for our family. My wife was disappointed that in Panama the RAV4 does not include the 3rd seat row option, but it still is a good choice for our small family.
Also, we figured if we bought a newer car, not older than 2011, the issue of deferred maintenance wouldn’t be a major consideration.
Plus we simply wanted a newer, nice looking car. We were weary of taking long trips in our rattle-trap of a truck.
Ideally we wanted to find someone who had serviced the car exclusively at Ricardo Perez.
Ricardo Perez is Panama’s one and only Toyota dealer. He has car lots and repair shops throughout the country. I imagine that Mr. Perez must be very connected to have won an exclusive contract with Toyota.
Why Ricardo Perez
Ricardo Perez has a centralized computer system which records each car’s service visits to any of its service stations. You can request a print out of all the work done a specific car. Also, their mechanics seem to be better trained and to do higher quality repairs.
Looking at Used Car Lots
We did look at a number of used car lots while we were in Panama City. But we did not find the car we were looking for.
I have heard good things about Patel Autos. P.S in Panama City. You may want to check them out: their website.
Looking in Classified Ads
We found the best place to look for cars is on encuentra24.com. New ads seem to be added daily.
There was no shortage of ads for our model. But the prices were all over the place.
- Nearly new cars, few kilometers at good prices,
- Older models with lots of kilometers for high prices
I think there are 2 reasons the asking price varies so much.
- There is no accepted authority, like the Blue Book in the US, to provide a baseline for a car’s value.
- Encuentra24’s car classifieds are free to sellers, so some sellers are clearly “testing the market” before lowering their car to a more realistic price.
More Cars Than Buyers
In our searches of the internet, we noticed that a number of cars in nearly new condition with low mileage had been listed on Encuentra24 for a month or more. This made us nervous until we considered all the whys.
If one thinks about it for a minute, it only stands to reason.
- Poorer Panamanians don’t have $10 – $20,000 in cash to buy a car
- Middle-class can easily get low-interest car loans – but only for cars from dealers.
- Wealthy Panamanians buy can afford to buy brand new cars
- Panamanians tend to want new cars.
The number of buyers who can afford and want to buy a “nearly new” car for $10-$20,000 is very limited.
Although Panama is leading the way among Latin American countries in creating a viable middle class, the country still has a long way to go.
The Car We Bought
The RAV 4 that we purchased was the first that we looked at.
A 2011 with 29,000 kms, asking price: $15,000, Being sold by the original owner.
It was purchased at the Ricardo Perez Toyota Dealership. All of its service was done by the dealership.
Interview the Sellers
I read somewhere that when you buy a used car, you are not “interviewing” the car so much as you are “interviewing” the sellers. ‘If you don’t trust, or like the seller, don’t buy the car.’
If you have some common ground with the seller, you will be able to relate with, and understand their needs and desires, and thus their true reason for selling, and their manner of treating their car, even in the absence of a service record.
In our case, the sellers were from Venezuela. Like many Venezuelans of means, they had opted to leave their native country, because of the danger there. They had been attacked and robbed in their home. They were very fortunate that no one in the family was permanently injured during the violent break in.
The husband, Antonio, went to graduate school in the U.S.. He spoke English very well, His wife didn’t speak English as well, but she could converse. We chatted in both English and in Spanish.
We swapped stories about Autumn leaves in Vermont, life in New York City, etc… Coincidentally, they had also traveled to Japan for a job interview. Since I had worked in Japan, we could also connect on that topic. We both have young children….anyway, we felt very comfortable with this couple. We liked them.
As far as the car sale was concerned, they said that they needed a car with a third row of seats, so that they could go to their son’s traditional dance performances and have room for their two children, as well as the grand parents. The story made perfect sense. We own a mini van in the states, and we know how convenient a third row of seats is for car pooling a bunch of kids to their various activities.
The husband, Antonio, a very nice man, clearly prided himself on taking excellent care of the family cars. His car is a Toyota HiLux. It was clear how much he loved his truck. His wife just shook her head over it. (FYI Toyota HiLux is what the Toyota Tacoma is called in central America.). It was clear that he was a fastidious and careful man. He valued buying the best, and then taking immaculate care of it.
This is just the sort of seller we had hoped to meet. Later, I got to ride in Antonio’s perfect HiLux. If I were ever in the market for a Hilux, I would certainly want to know if Antonio were ready to sell his.
Inspection of the Car
The four of us took it in to Ricardo Perez for an inspection. We went to the Ricardo Perez Express site near the Albrook Mall.
The mechanic gave us a new printout of all service checks (basically just oil changes). The print out matched the service record that the sellers had shown us.
We also had them inspect and evaluate the car, including a full computer analysis.
The inspection revealed a great car.
We made an offer and we quickly agreed upon a price. We were happy to find out later that the sales price was under the Blue Book value for the car.
However, this is unusual, cars in Panama are usually the same or higher price than in the USA.
That was on a Saturday.
Sunday we hired a taxi for a driving tour of the city. There was very little traffic, since it was Sunday. We ended up at our favorite cafe in the Casco Viejo, the Tantalo
Closing the deal
Early Monday morning I went to my bank to get a cashier’s check for the agreed upon price. (Also on Monday, thinking the paperwork might take a few days, my wife flew home to our children.)
Antonio (the owner) picked me up to go on the rounds to transfer ownership of the car to me.
Any person you buy the car from will do the same for you. Both owners, old and new, must be present to sign all the documents. It only took about 2 hours to get it all done.
See the 7th step, below, for all the places you must visit to transfer ownership.
They keep the insurance on the car for one week to give us time to get it. More about insurance below.
The couple (“Antonio and Carolina”) who sold us the car have encouraged us to come for a visit, and to contact them if we ever “need any help” of any kind. In turn, we have invited them and their children to stay with our family if they are ever near Puerto Armuelles.
Both they and we agreed that the car purchase and sale was a pleasure for all of us. We feel as if we have made new friends.
7 Steps To Owning A Used Car In Panama
1) Find Cars For Sale
- encuentra24.com was our favorite classifieds site
- Ask at used car lots and at dealerships (You can view Ricardo Perez’s used cars online)
- Keep an eye out for high visibility locations where people often park their car for sale
- Go to Panama City to save money
Most of the cars, like most of the people in Panama, are in Panama City. We could have a good car in David. However, prices in Panama City were ~$2000 less for a comparable car. Plus all the cars we were interested in were in Panama City.
My wife and I decided to make a romantic weekend out of it too. We left the kids at home with a friend. We even flew to Panama City. It was fun & very fast to fly.
2) Pre-Interview & Make Appointments
Call and make an appointment to see the car.
While you are at it, do alittle pre-interview on the phone.
We called about 2 cars we wanted to see on Saturday. One guys seemed alittle squirrelly in his answers to our questions. He seemed like he might be a car dealer pretending that his wife was the owner. We saw that he had other cars listed for sale on encuentra24 as well. The other owner seemed to be a better choice. We put off the questionable “owner” for later, if ever, in the day. It turns out we never did see that car.
Note: As in the states, we assumed that the weekend would be the best time to car shop, since more sellers would be available to show cars.
Our Tour of Car lots
Just for a quick comparison & to see if we were missing anything, we decided to stop in at some car lots. We went to:
- The auto transistmica, a 5 block area with a lot of used car lots.
- Ricardo Perezes’ used car lot
- We went one other place, but it is a blur in my mind now.
Only one lot we visited had a newer Toyota RAV4, but looked trashed. The RAV4s at Ricardo Perez used lot were a lot more expensive than similar prices on encuentra24.
Given our experiences at the car lots, we were very happy to be dealing with car owners, not salespeople.
4) Interview the Owners
Chat with the owners. Ask about themselves, why they are selling the car. Ask about issues with the car. How they maintained it, if it has been in an accident, etc..
Get to know them alittle. Do they seem like fine people with a plausible reason for selling the car?
5) Car Inspection
We accompanied the sellers to have it inspected. We went to the Ricardo Perez Express, which is close to Albrook Mall.
Even if the car does not have any connection to Ricardo Perez for you to ask them to do a car inspection.
Our inspection cost $130.
6) Agree Upon the Price & Visit Bank
Once you agree upon the price, the typical way to pay for it is a cashier’s check. It is called a Cheque de Gerencia. Remember, don’t give the owner the check until you have transfer ownership.
You cannot get the deals on a car here that you can sometimes get in the States.
- New car prices are 25% higher in Panama. Think import taxes, etc..
- There are very few bargains on older cars. My wife bought her first car for $50 and it ran for 3 years (Okay it was a Ford Pinto, but still.) Old cars here are almost never in good shape. They are just not well-maintained.
7) Transfer Ownership
Any person you buy the car from will take you on the rounds of all the required offices. Both owners, old and new, must be present to sign all the documents to transfer ownership.
- 1st – City Hall (Municipio) to sign the transfer (traspaso) of the seller’s title (Registro Unico).
- 2nd – with this paperwork signed, you and the sell go to the ATT (Autoridad de Transporte y Transito).
- That is where the car title, now in your name is issued. It only took 15 minutes for them to hand mine to me.
- 3rd – Now is the time to give the seller his or her cashier’s check (Cheque de Gerencia).
How Long Does It Take?
The tour of the offices took us only 2 hours.
A friend of ours did the same office tour last year and it took days. It depends on both how effefient your seller is and the time of the month that buy your car. As I discuss below, do not go at the end of the month.
The car is now yours, but it is registered in Panama City.
This isn’t a problem, unless you don’t want to renew the registration in Panama City every year.
If you want to transfer it to another city you must go back to Panama City just before your registration expires. You do not need to bring the car. But you (or someone who is acting on your behalf) must visit city hall and get the documents necessary to transfer it to your city. You then must take the to the city hall in your city and both transfer the office and go through the registration renewal process.
Better To Buy Your Car Early In Month
Our car purchase took place near the beginning of the month. If it had been closer to the end of the month, especially the last day of the month (any month) the lines in the municipio and the ATT would have been much, much longer. Generally people come into pay car registration, taxes at the end or middle of the month. That is when people have the funds. Both paychecks and social security checks are issued then.
Panamanians, even more so than North Americans, are notorious for living paycheck to paycheck. Thus, you will see far longer lines at the grocery, hardware store, cell phone store, etc….right after payday, which is generally the middle and the end of each month.
Car insurance is the law in Panama.
I highly recommend that you at least get the minimum liability insurance required by law.
The cost is usually ~ $100 a year.
Now you have your car. Enjoy the ride!
Find out whether to ship your car to Panama