Used car imports decrease in Costa Rica, businesses threatened

The business of importing and selling used cars in Costa Rica is dwindling, the Costa Rican Automotive Chamber said this week.

Chamber President José Carballo said that 2,000 local importers could lose their businesses, which would mean the loss of some 50,000 jobs.

In addition, the Finance Ministry would lose some ₡48 billion ($96 million) in taxes from the companies, he said.

Used cars imports decereased by 40 percent in the first five months of 2013, compared to the same period last year, according to Finance Ministry data.

Business owners attribute the decrease to recent government policies that affect the importation of used cars into the country.

The measures include an increase in the taxable value of vehicles, approved last December, and an increase in taxes on cars entering the country. Owners of new cars currently pay a 53 percent tax while used car owners pay 79 percent.

A traffic law passed last year also prohibits the importation of vehicles that were totaled in accidents. In the past, importers bought damaged cars to use for spare parts.

The Automotive Chamber also reported problems with customs efficiency. New screening procedures have caused at least two-week delays for owners to retrieve vehicles from customs. Customs processing for new cars takes only a few days. 

Representatives of the Chamber and the Finance Ministry will meet later this month to evaluate possible solutions.