New Car Prices in Mexico vs United States

New Car Prices in Mexico vs United States – How Do They Compare?

Being in the car business for the last half-decade has opened my eyes to the many potential questions and concerns my clients will have regarding the car-buying process.

One of the most common questions I get asked is about new car prices in Mexico vs United States and how they really compare.

Are new cars cheaper in Mexico or are they more expensive? Let’s find out!

It’s important to mention that used cars are a different story altogether and in today’s article we will focus specifically on new cars.

Are New Cars Cheaper in Mexico?

A frequent misconception that people will have about Mexico is that things will be cheaper than in the United States or Canada.

While this might be true with some goods and with the average cost of living in general; some products and services can be just as expensive as north of the border.

With cars, I’ve found that vehicle pricing will either be comparable, if not cheaper than the rest of North America.

The exchange rate of USD to MXN also plays a huge role in this and, as of the time this article was written, it was not the most favorable. This, in turn, affects the actual perspective of cost.

The first thing that car buyers need to understand is that the car buying process is a lot different in Mexico than what they might be used to. I highly recommend checking out our write-up on How to Buy a New Car in Mexico, if you haven’t already read it.

In short, new vehicles can’t actually be built to spec in Mexico; there are exceptions in premium brands like BMW and Porsche.

If you visit any official website, you will find fixed pricing for different models and trims. You as a buyer have the option of choosing between the different packages offered in Mexico; each package comes with its own equipment, which can’t be eliminated or replaced.

This is where a lot of the confusion begins because the starting trim for vehicles in the States will give you very few options. Whereas the most basic trim in Mexico will already have plenty of standard features.

Car buyers will see the “Starting at…” price for the US and compare it to the base model in Mexico while ignoring the features that they come with.

So let’s put these facts to the test and show you a real-world example using the 2023 Subaru Forester. I originally intended on using the Honda CR-V, but the 2024s are not yet available in Mexico – so it wouldn’t be a fair comparison.

2023 Subaru Forester Touring SUV Price Comparison: Mexico vs. USA

For this exercise, I’m going to be comparing the fully equipped 2023 Subaru Forester, which is sold in both Mexico and the States with virtually the same equipment.

Let’s start off with the pricing directly from the Subaru website in the USA. A fully loaded Subaru Forester is sold under the “Touring” name.

USA Pricing

The 2023 Subaru Forester Touring comes with a backup camera, driver safety assistance system (Eyesight), power windows and mirrors, power seats, leather interior, sunroof, premium Harman Kardon sound system, etc.

The MSRP on a Touring trim with no added accessories (roof rack, rubber mats, etc. ) in the color white with brown interior is listed by the manufacturer at $40,109 USD.

It’s important to mention that these prices are listed on the manufacturer’s website and are MSRP. Once the vehicles reach the dealer, it’s up to the buyer to find out what the dealer’s asking price is -which could be higher- and try to negotiate a deal.

The price will not include handling and delivery fees which will vary depending on the vehicle, state of purchase, etc.

In other words, a Honda might pay more in handling and delivery than a Subaru, and the client might be charged a bit more for delivery in Texas rather than say, Florida.

Above is an image of one of many Subaru dealers that list MSRP prices on their websites yet don’t show the actual price. You have to call, email, or visit the dealership to get real numbers from them.

After that, you then have to license and register the vehicle. This will be an additional expense that will vary depending on your state of residence.

For the fun of it, I simulated the cost of registering the white Subaru Forester with an MSRP of $40,109 in the state of California. The total cost came down to $3,673 USD.

This means that if I’m a good negotiator and can currently get the vehicle for MSRP -especially with the lack of inventory- a new 2023 Subaru Forester Touring, purchased in the state of California, will currently cost me $43,782 USD – not including handling and delivery, or insurance.

Let’s not forget that dealer markups are a very real thing in the United States and a common practice; after the vehicle shortages that started with the pandemic several years ago.

Mexico Pricing

Mexico is a lot different than the States and a lot easier to determine the price.

With the exception of the manufacturer running a rebate or discount, the price you see on the website is the price you will pay for the vehicle.

There is no negotiating to be done and dealer markups are extremely rare down here.

What is happening with the ongoing shortages is that some manufacturers will prioritize selling their inventory through their financing department to maximize profit.

In some instances, they will consider selling cash but will “encourage” the client to spend money within their accessories department – otherwise, they might decide to not sell the vehicle to the client and will to another that agrees to their terms and conditions.

A new 2023 Subaru Forester Touring currently costs $739,9000 pesos. There are no handling and delivery charges, but there is a cost to plate and register that will vary from state to state. In general, the registration fees, plates, and paperwork should not exceed $5,000 – $7,000 pesos.

Going off these numbers, the vehicle will cost roughly $744,900 pesos – not including insurance.

Based on today’s exchange rate ($17 MXN = USD), a 2023 Subaru Forester Touring costs approximately $43,818 USD. 

As mentioned at the beginning of the article, the exchange rate is a big factor when it comes to the final pricing paid on the vehicle for Americans and Canadians in Mexico.

If we were going based on the exchange rate of 20 MXN per USD that we had several months ago, a fully-loaded Subaru Forester would have only costed $37,245 USD.

That’s a pretty big price difference.

Conclusion

In conclusion, the cost of new vehicles in Mexico can be different from that of the United States. The exchange rate plays a big role in this, but all things considered, even under today’s currency situation, new cars are very similar in price.

This is not to say that some brands and models might be available for cheaper north of the border, but in my experience, pricing has been generally equal if not lower in Mexico.

This could also be viewed as cars in Mexico being more expensive in general, since average wages are considerably less than in the States or Canada.