How to Buy a Used Car in Mexico

Compared to buying a new car, the process of purchasing a used car in Mexico is an entirely different experience.

I’ll start off by saying that buying a used vehicle -the proper way- can often require a lot of time and effort. Sometimes, all it takes to go down a deep rabbit hole with no return is missing or overlooking a small detail.

In some instances, all the pieces will fall together perfectly and you can end up driving away in a great used car with little to no effort.

This doesn’t mean that you should skip doing your homework though. Buying a vehicle is no small transaction and should always be taken seriously.

Starting the Process

One of the most frequent questions I get asked by expats moving down from the United States is if there is such a thing as Carfax in Mexico.

Now, while Carfax, is far from being perfect, it is quite a handy tool for car buying that can save the buyer a lot of time and headaches.

Sadly, no such thing exists in Mexico.

So, how does one go about avoiding buying and getting stuck with a lemon? The quick answer? Research, due diligence, and common sense mixed with trusting your gut feeling.

There will always be a lot more to buying a used car than meets the eye, but doing your homework coupled with following your instincts is a great way to avoid getting into trouble.

Our goal with this article is that you have an in-depth understanding of how we view and tackle used car buying in Mexico; and more specifically in the Lake Chapala and the Guadalajara areas.

Finding the right car

The first step, much like buying a new car, is determining which vehicle you would ideally like to find in the used market.

Are you looking for a crossover, midsize SUV, hatchback, sedan, truck, etc? Do you have an idea of how new or old you would like to go?

Do you have a desired budget, preferred color, trim, etc?

Two big mistakes that buyers will often make are not doing enough homework regarding the costs of vehicles; as well as narrowing down their search way too much and eliminating potentially-good vehicles from their search.

I’ve had clients lose out on buying an excellent vehicle simply because they didn’t like the exterior color – even though the car checked all the right boxes.

My recommendation, especially in today’s difficult market, is that if you find a great vehicle, and it’s 90% what you want – don’t hesitate to buy it or you’ll lose it.

You never know when another opportunity will become available.

A lot of buyers will often begin their search on websites like Facebook, Mercado Libre, or Kavak.

They will also visit lots and dealers to get an idea of what’s available and how much it’s selling for.

This is a great way to start a search as well as getting a feel and understanding of the market.

As far as where to look for a good used vehicle, the easiest and most effective way is by using our services.

We deal with a series of reputable dealerships and lots that keep a wide selection of vehicles.

For a reasonable fee, we will help you find a good vehicle as well as handle all the paperwork and legalities involved in having it registered.

First impressions

The first thing we do when we’ve narrowed down the used vehicle that we’re interested in or considering for a client is do a careful walk around the car to assess its general condition.

We will first want to look for both small and larger damage, signs of repainting/repairs, differences in paint color and texture, etc.

Doing this can save us a lot of time and trouble from the beginning.

Instant red flags will keep us from spending more time on the vehicle.

Keep in mind that no used vehicle will be perfect. Repainted bumpers and small scratches are very, very common down here.

Don’t believe me? Ask any car owner that lives Lakeside and they will validate this information. While obviously exaggerated, driving in Mexico can sometimes appear to be kamikaze.

What we’re looking for in our walkaround are signs of a more serious accident or repaint that could have led to other damages and replaced parts within the vehicle.

If all looks good on the outside (paint, body panels, tires, etc.), we will then move forward with checking underneath the vehicle; then following with under the hood (oil, coolant, brake fluid, etc.)– Only to finish with the interior.

Prior to test driving the vehicle, we always like to make sure that it hasn’t been started recently and is still warm.

This can hide issues that would normally present themselves when the vehicle is started cold.

We will try the different switches and buttons, doors and handles, as well as shifting through the transmission in an attempt to make sure that everything is working as it should.

Air conditioning, lights, and windshield sprayer and wipers should also be checked for proper functioning.

Test Drive

If everything checks out in our preliminary inspection, the next part of the process is taking the vehicle for a test drive.

Going for a test drive can tell you a lot about a car; so much, in fact, that we would never recommend buying the vehicle without first taking it for a spin.

During the drive, we will want to have the radio and AC off at first so we can listen for unusual noises coming from the engine and suspension.

Squeaks and rattles from the interior can be normal due to a mix of our roads and possible build quality from the manufacturer; some cars’ interiors squeak more than others.

A few things we like to test are the steering to make sure the vehicle doesn’t pull and the alignment is correct.

We will also want to test the suspension, if possible, on good and bad roads. Lastly, we will also want to test the vehicle’s shifting, braking, and acceleration.

If the vehicle passes the test drive portion of our inspection, we can then move on to the vehicle’s history.

Vehicle History

The history of a vehicle can tell us a lot, without even having to look at the actual car.

Did the previous owner(s) maintain it properly? Was it in the shop for repairs frequently? If so, what parts were replaced?

On newer vehicles that might still have a manufacturer warranty; skipping a service will equate to the instant cancellation of the warranty that would normally be transferable to the new owner.

So, that’s something to be very careful with.

We’ve witnessed people buy cars under the impression that they still have a manufacturer warranty when they actually don’t because the previous owner never serviced the car or missed a service.

It is also not uncommon for some people to do their own maintenance or have their mechanic of trust work on it.

Ultimately, there are multiple ways to interpret a service history – you just have to be aware of the possible scenarios and go with your gut feeling.

Vehicle Documentation

Some buyers would maybe assume that the next step in the used car buying process is to have a mechanical inspection done on the vehicle.

While not a bad idea, I would first put the wallet away and ask to see documentation on the car.

The car that you might be ready to pull the trigger on might look like a really great deal but, what if the documentation doesn’t check out?

Documentation in Mexico is a very delicate subject that requires a lot of attention to detail. One missing piece of paper and you’re potentially in trouble.

This is why it’s crucial to make sure the title and registration are all in order. As well as making sure the plates are legal, there is no theft report, and there are no outstanding tickets on the vehicle.

One way to limit potential risks is by buying a vehicle in the state where you are living and will be registering it.

For us that live in Lake Chapala, you will want to stick with Jalisco plates, since it will make validating the plates and paperwork much easier, as well as transferring the ownership.

There are a couple of websites that are great tools for checking if the vehicle owes any money or if it has ever been stolen.

On the subject of buying a vehicle with out-of-state plates, it can honestly be more trouble than it’s worth and put you in a sticky situation should you have an insurance claim or would like to sell the vehicle one day.

Mechanical Inspection

If the vehicle appears to be visually good and the paperwork is all in order, we would then recommend having a mechanic inspect the vehicle.

This can be a bit tricky if the vehicle is in Guadalajara as most lots and dealers will not allow the vehicle to leave their floor and will recommend bringing a mechanic to them.

In some instances, if the vehicle is being sold by a dealer with a warranty, they would have done a pre-purchase inspection which they can generally share if asked for.

In any case, a mechanical inspection is essential when buying a used car. If the person or business selling it is against the buyer having it looked at, that is a huge red flag.

Payment

Payment for used cars can be very similar to buying a new one, depending on where you buy the vehicle.

If you’ve read up on our New Car Buying Guide, you saw that in Mexico a new vehicle can be purchased at a dealer via SPEI transfer, credit/debit card, or an international wire.

With used cars being sold at dealers, these methods will often apply, but not always.

Lots and private parties will be an entirely different story, with them both often preferring a SPEI transfer.

Although very risky, it is also not uncommon in Mexico for sellers to ask for payment in actual cash bills.

Last but not least, because Lake Chapala is home to a lot of expats, some of our consignment vehicles can be paid either partly or fully in USD or CAD via transfer.

Used cars are simply a mixed bag and payment will highly depend on who’s selling the vehicle and how they want to be paid.

Registration, insurance, and transfer of ownership

There are a series of possible scenarios for buying a used car that will determine how the registration and transfer of ownership process will look like.

Scenario A: Person to person

This scenario is the most common one in Mexico.

It can happen when you buy a car from a friend, online, or even from a dealer or lot that is selling for someone.

What generally happens here is that the back of the title is endorsed into the new buyer’s name and then transferred at a local state DMV (Recaudadora Estatal).

The seller generally determines if they will take the plates off and make the buyer get new ones or just transfer the old ones into the new owner’s name – saving them an added expense.

When the vehicle is transferred within the state of Jalisco, there will be a buy-sell tax that can be as high as 7.1%. The amount is calculated internally by the state, but as a general rule of thumb, the newer the vehicle, the closer it will pay to the maximum percentage.

Regarding the value of the vehicle, to base the tax on, at the time of transfer, it is also a mystery how they actually determine its worth.

Scenario B: Dealer/company to person

This scenario is also very common and happens when a dealer or company is selling a vehicle. The advantage to this method is that they can often invoice the vehicle with full IVA and save the buyer the cost of the buy-sell tax.

Most dealers work it this way, but it still doesn’t mean that you might not have to also pay for plates, depending on the situation.

The state also charges a simple transfer tax that’s a few thousand pesos.

One of the downsides to this method is that the vehicle will now be sold under a new invoice, rather than the original.

Some people feel like having the original title adds more value to the vehicle.

Scenario C: Out-of-state plates

Buying a car with out-of-state plates that will ultimately be registered in Jalisco is an entirely different situation altogether.

To do this, the vehicle has to undergo a validation process in the city of Guadalajara; Tonala, and Tesistan, actually.

This process can be done by the interested party or a specialized person called a “gestor”.

To accomplish it, the vehicle must be driving in with an appointment early in the morning, alongside all of its documentation. The vehicle then undergoes a thorough inspection to make sure everything is legal with it and its paperwork.

If the vehicle passes, you can then get Jalisco plates and registration. If it fails, you have to follow the office’s instructions, and can potentially risk it being confiscated, depending on what they found on the vehicle.

This is why you have to absolutely sure the out-of-state vehicle you are buying ticks all the right boxes. Otherwise, you will be out a large chunk of money.

A special note on the ownership documents

In any registration process, the seller must have all documents pertaining to the ownership of the car, including the original invoice/tile (Factura), or if the vehicle has been reinvoiced, a copy of the original is needed alongside subsequent copies of invoice(s) and the current original factura. The most recent receipt of registration is also needed.

Conclusion

Buying a used vehicle in Lake Chapala, or Mexico in general, doesn’t have to be difficult or scary.

It simply takes doing a lot of homework and trusting yourself -or the right people- in finding a good vehicle.

In short, the paperwork is just as important as the mechanical aspects and both deserve their own amount of homework.

Also, we are currently seeing a shortage of good, used cars. Those that are available will be higher priced and in some cases almost as much as a new one.

If you need assistance with finding a good used car, send us your information as well as the type of vehicle you’re interested in, and we will help you find what you’re looking for.