Are Cars Cheaper in Mexico?

Some cars are cheaper in Mexico, but it depends on the vehicle and consumer demand.
Written by Matt Nightingale
Reviewed by Jessica Barrett
Car prices have soared to record heights in recent years, with American consumers paying 12.2% more for new cars and a whopping 40.5% more for used cars. So, are cars cheaper in Mexico? The answer is: it depends on the car.
Mexico is known for its high temperatures and low-priced consumer goods, so you’d be forgiven if you thought that cars would be cheaper all around in Mexico. It’s a little more complicated than that, though. 
Fortunately, we've crunched the numbers for you. In this article, we’ll look at which cars are cheaper to buy in Mexico, why they sell for less, and whether it’s worth importing a car from Mexico.
Peso for peso, this is your best guide to buying a car in Mexico.
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Is it cheaper to buy a car in Mexico?

You might think that because many consumer goods are cheaper in Mexico, cars would be cheaper on the whole, as well. While some cars are cheaper in Mexico, others are actually more expensive
Here’s how new vehicle prices in Mexico compare to prices for the same vehicle in the US:
Dodge Ram Longhorn
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As you can see from the chart above the ,
Toyota Rav4
, and
Nissan Versa
have a smaller MSRP than the same make and model in the US. On the other hand, the Dodge Ram Longhorn,
Tesla Model 3
, and Chevy Suburban are all more expensive south of the border.
A lot of this has to do with market demand. Smaller compact and sub-compact vehicles are wildly popular in Mexico, with subcompact sedans accounting for 37% of the Mexican car market. Because of this, manufacturers can sell these models at a lower price knowing that they’ll sell more of them, thereby offsetting the lower MSRP.
The same rings true in the US for larger crossover SUVs and heavy-duty pick-up trucks. Manufacturers can sell these vehicles for less and still generate handsome revenues due to the sheer numbers they’ll be able to sell.
For example, in 2021
sold 35,249 units of its Rio model subcompact sedan in Mexico. In contrast, Kia sold 31,362 units in the US, a country with more than twice the population. In Mexico, the 2022 Kia Rio starts at a base model price of $15,362 USD, while in America, base model 2022 Rio starts from $17,305 USD.
On the other hand, the 2022 Dodge Ram 1500 Longhorn sells for $66,972 USD in Mexico,  $8,000 USD more than the US starting price of $58,275 USD.
The cheapest car you can buy in Mexico is the Fiat Mobi, which retails for around $9,630 USD.
Key Takeaway Depending on the make and model, cars can be cheaper or more expensive in Mexico compared to the US.
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Why aren’t cars cheaper in Mexico?

The big reason cars aren’t always cheaper in Mexico is because of market demand. The more popular a car is, the cheaper it can be sold by the manufacturer while still making a tidy profit. In the US, large SUVs and pick-up trucks are quite popular and so can be bought for less in America than in Mexico.
Manufacturers also offer different trim levels and standard features on cars in different markets. For example, in the US, the Dodge Ram Longhorn comes equipped with a 3.6-liter gas/electric hybrid V-6 engine. In Mexico, the Longhorn is outfitted with a standard 5.7-liter V-8 hybrid engine.
The price of used cars in Mexico is a little more difficult to estimate and depends on things like the car’s age, condition, and mileage.

The hidden costs of buying a car in Mexico

Although some cars are still cheaper to buy in Mexico, the sticker price is not the final word. No matter where you are, car ownership comes with a lot of hidden costs—even in Mexico.
Here are some of the extra costs car buyers face in Mexico:
  • Sales tax in Mexico ranges between 11% and 17% depending on where you are. This is a huge hidden cost when you consider that the most expensive US states to purchase a car in have a sales tax rate of around 11.5%.
  • The vehicle purchase tax is imposed on all car buyers, which amounts to between 2% and 17% of the car’s purchase price and is paid monthly. 
  • The vehicle ownership tax varies from state to state and is paid annually.
  • Third-party liability
    car insurance
    is required for all drivers in Mexico. It is recommended that drivers in Mexico carry at least $300,000 USD in liability coverage.
So, while some cars actually are cheaper in Mexico, the additional taxes and insurance costs often make up for the smaller sticker price.
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Can a US citizen buy a car in Mexico?

US citizens are allowed to purchase vehicles in Mexico. When you consider all the variables and hidden costs in play, however, it may not be worth the time and money. Before you make the trip south, you’ll want to be clear about why you want to purchase a car from Mexico and what that entails.

Why do some people want to buy a car from Mexico?

One reason you may want to buy a car in Mexico is that it is cheaper than the same make and model in the US. Another reason could be that the particular car you have your eye on isn’t available in the US to begin with. 
You’ll want to be careful in both these instances. Car makers will often release vehicles that do not meet American environmental and safety standards in countries with more lax regulations. If that’s the case, you probably won’t be able to bring it home across the border.
Here is a list of cars available only in Mexico:
  • Dodge Attitude
  • Honda City
  • Fiat Siena
  • Volkswagen CrossFox
  • Ford Ikon
  • Peugeot RCZ
  • Nissan Tsuru
  • Hyundai Grand i10
  • Chevy Tornado
  • Chevy Captiva
  • Daewoo Matiz
  • Volkswagen Clasico
  • Ford Figo
These cars typically do not adhere to EPA and DOT standards, which is why they are not made available for purchase in the US.
Key Takeaway Many cars manufactured outside the US don’t meet American environmental and safety standards and will not be allowed into the country.

What you’ll need to buy a car in Mexico

If you’re not overly familiar with the Mexican car market, a broker can help you find the best deal for a fee of $200–$500. And if you don’t speak Spanish, you might want to consider hiring a translator to help you with your purchase. A translator runs about $10 USD per hour.
You’ll also need:
  • Passport 
  • Tourist visa
  • Plane ticket
  • Hotel or other accommodations
Be sure to factor all these extra costs into the price of your new car to make sure it’s worth the time and effort.

What you’ll need to bring your car back to the US from Mexico

Buying a car in Mexico is one thing—but bringing it back to the US is something else entirely.
The US keeps a database of all vehicles entering the country and ensures that these vehicles meet stringent environmental and safety standards. To bring your new car back to the US successfully, it will need to meet US EPA emissions standards and Department of Transportation safety standards. If the vehicle does not meet these standards, it can be deported or destroyed.
Look for EPA and DOT stickers on your new car. The DOT sticker is located on the driver’s side door jamb and must be in English. The presence of these stickers is a must for importation—but is still not a guarantee that your car will be allowed into the US.
If you’re planning on driving your car back to the United States, you’ll need car insurance. Your American policy is no good in Mexico, so you will have to get car insurance from a Mexican provider. It is recommended that drivers carry at least $300,000 in third-party liability coverage when driving in Mexico.

Fees you’ll have to pay to bring your car back from Mexico

There are a number of fees that you’ll need to pay to bring your car home from Mexico.
  • Duty. There is no duty collected on the first $800 of the value of the vehicle. Three percent is charged on the next $1,000 of value, and after that regular duty rates are applied to the remaining value.
  • Taxes. The amount you’ll pay will vary from state to state, so you’ll pay a little more if you live in a high tax state like
    New York
    and a little less if you live in a lower tax state like
  • Shipping fees. How much you pay will depend on the distance the car must travel. For a cross-border shipment, you can expect to pay at least $1,200.
Some cars are easier to import into the US than others. Vehicles that were originally manufactured to be driven in the US have an easier time crossing the border because they are more likely to meet US safety and emissions standards. 
Antique cars also have an easier time at the border. Certain makes and models of cars that are 25 years old or older are eligible to be imported as antiques even if they do not meet the usual environmental and safety requirements.
Key Takeaway There are many additional fees attached to importing a vehicle from Mexico that can make the process not worth the time or money.

Things to watch for when buying a car in Mexico

Being from a different country and speaking a different language makes you vulnerable to scams or simply making a bad deal.
If you don’t speak Spanish, hiring a translator is a good idea. They’re relatively cheap—about $10 per hour—and they can save you from being taken advantage of or falling victim to simple misunderstandings.
You’ll also want to watch out for brokers who advertise low or no import fees or refundable sales tax. These claims are often scams.
If you ship your car, be sure not to leave any personal belongings in the car—especially illegal items. Transporters may not accept your car if there are any items in the cabin. Worse yet, If your car has any personal items inside it while crossing the border, it can be seized.

How to get the best insurance for your new car

Once you’ve got your car home to the US, you’ll need good car insurance. The good news is that it’s probably easier to find cheap
car insurance
than it is to find a cheap car in Mexico. Just use the
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