There is one question almost every client asks me in the first few weeks, and it always comes in the same tone, half hope, half defiance: I have a good car in the garage, well looked after, full service history, I will bring it with me. I understand the impulse. The car is paid for, you know it, and it feels like a bit of control in a move where everything else is new.
And yet, after many years down here, my answer is almost always the same: don't. Sell the car at home and buy one locally that suits the place. In this article I show you why importing is, in almost every case, an expensive piece of sentimentality, where the few genuine exceptions lie, how to buy safely on the ground, what registration, insurance and your driving licence really involve, and what driving here feels like once the brochure shine has worn off.
Why importing almost never pays
Let's start with the maths, because it ends most discussions on its own.
In Panama you pay a tiered excise duty on an imported vehicle of roughly 15 to 25% depending on its value, plus 7% ITBMS (sales tax), calculated on the CIF value including duty, so tax on tax. The basis is not what you paid five years ago but value plus freight plus insurance. PwC gives you an overview of the Panamanian tax system. Add shipping, port fees, an agent and homologation, and your paid-off car suddenly carries a five-figure price tag again.
Paraguay settles the matter by age: used cars older than ten years cannot be imported at all, and the excise duty rises so steeply with the vehicle's age that older imports hardly make sense even below the limit.
Uruguay is the hardest case: there, private individuals have been banned in principle from importing used vehicles since 2005, under Ley 17.887. The customs authority lists the few exceptions itself, and your family estate car is not among them.
Then there is a point almost nobody has on their radar, even though in daily life it is the most expensive one: the parts network. All of Latin America drives on the right, with left-hand-drive cars, so if you come from continental Europe or North America your car would be technically quite normal here. Only the left-hand-traffic neighbours Guyana and Suriname are the odd ones out. If you are bringing a right-hand-drive car from the UK, Ireland, Australia or New Zealand, it starts out as the wrong car for the road. But even a left-hand-drive European model is an exotic here. Your diesel estate with a European engine variant, European control unit and European suspension simply does not exist in the spare parts stock of Asunción or Montevideo. The workshop does not know the model, the control unit will not talk to any diagnostic tester, and every part comes by air freight from Europe, with weeks of waiting and duty on top. This is the everyday experience reported in countless expat forums and in my own circle of acquaintances: the people who brought their car sell it, exasperated, after two years, and sell it badly, because nobody here wants it.
Household goods allowances: where the exception is real and where it is not
Now for the part where a lot of half-truths circulate. Yes, most countries allow new residents to bring household goods duty-free. But as a rule that means furniture, household effects, tools and personal belongings. Vehicles are almost everywhere expressly excluded or regulated separately.
The case I am asked about most often is Uruguay, and precision pays off here. There really was a vehicle allowance for new foreign residents: a one-off duty-free import of your own vehicle, owned for at least one year, with a two-year ban on resale and registration within 30 days. But it was introduced by Article 691 of Ley 19.924 and applied only to residence granted in the window from 1 January 2020 to 31 March 2021. That window has been closed for years. And the latest budget law, Ley 20.446, in force since 1 January 2026, has not reopened it: I have checked the text of the law on exactly that point, and a new edition of the resident allowance is not in it. What it does contain is a different curiosity: classic cars aged 50 years or more may be imported duty-free, with a five-year ban on resale. So if you want to emigrate with a 1970s Beetle, go ahead. For everyone else, the ban stands. There is also a returnee rule for Uruguayans in the migration law, which is of no use to you as a foreigner. What else Ley 20.446 changed on the tax side is covered in our article on the Uruguay tax reform 2026.
The one exception that really holds is Panama: holders of Pensionado residence may import one vehicle duty-free every two years. That is a genuine, recurring advantage, and for retirees with a soft spot for a particular model it can pay off. More on this status in the Pensionado guide. But even then the parts objection applies: import something that exists here, not your one-of-a-kind European model.
Buying locally: what to expect
The price question first, answered honestly: new cars are not cheaper everywhere than in Europe, and in some places they are considerably more expensive. Uruguay adds 23% duty on vehicles from outside Mercosur, 22% VAT and the IMESI excise tax, at a rate of around 35% for diesels; the local trade press calculates that a car ends up costing roughly double its price at the port. Paraguay is the opposite: 5 to 20% duty, 10% VAT, electric cars largely exempt, and the market is correspondingly cheap. Panama sits in between. So do not count on bargains; budget the car as an item in your cost of living.
The used market has its own rules. In Paraguay a large part of the stock consists of Japanese imports that came into the country through Chilean ports; prices are low, but odometer readings and accident histories are often works of fiction. In Uruguay the import ban keeps stock scarce, used cars hardly lose value, and you pay a lot to get something old. Everywhere, the average condition is worse than on a European forecourt, while the cosmetic valeting is better. An independent mechanic you trust, who has had the car up on the lift before you buy, is not optional; it is a must. It costs the equivalent of EUR 50 to 100 and has personally saved me twice from a disastrous purchase.
On the choice of model the picture is clear, and you can see it on every road: Toyota dominates, above all the Hilux and Corolla, alongside Kia, Hyundai, Chevrolet, Nissan and, increasingly, Chinese brands. Buy what the taxi drivers and the farmers drive, because every village workshop can repair those models and every provincial town has parts for them. A robust pickup or a simple Toyota is not a question of style here but of the availability of nuts and bolts.
And then the paperwork, the part where buyers really lose money. In Latin America you do not buy a car with a handshake and a logbook. In Paraguay, for example, the transfer must go through a notarial deed, with a register extract on ownership and liens, a police certificate that the car has not been reported stolen, and proof that the municipal vehicle tax has been paid; a registered prenda, that is a bank's lien, blocks the transfer until it has been cleared. In Uruguay the escribano (notary) checks the register and any outstanding patente (vehicle tax) debts. In Panama you need clearance from the municipality and the transport authority ATTT for the traspaso (transfer), and you should also check online whether toll debts are attached to the number plate, because they stick to the car, not to the seller. The registers have different names everywhere, but the principle is the same: without a current register extract on ownership and liens, without proof that taxes and fines are clear and without a proper transfer deed, you may well be buying the previous owner's debts and legal disputes along with the car. It is the same logic as buying property, just one size smaller.
Registering and insuring
Registration itself is administrative routine with local colour: empadronamiento at the municipality in Uruguay, registro and placa in Panama, the municipalidad in Paraguay. Plan days for it, not hours, or hand it to a gestor (a paperwork agent).
On insurance you need to keep two levels apart. Compulsory insurance on the model of the South American SOAT covers only personal injury and does not exist everywhere: Uruguay has straightforward compulsory cover for third-party personal injury with the SOA under Ley 18.412, Peru and Colombia also have their SOAT, and Panama requires liability cover as early as the traspaso. Paraguay, by contrast, introduced its SOAT in 2013 and abolished it again in 2014 by Ley 5150. You will see the consequence on the road: a considerable share of the vehicles around you are not insured at all. That is why my standard advice, on which I do not budge, is this: buy a private policy with proper liability cover and, importantly, protection against uninsured drivers.
Comprehensive cover as you know it from home is only realistic for newer vehicles, with noticeable excesses, approved-workshop clauses and exclusions you read before you sign. For a ten-year-old Hilux you often cannot get it at all; then you drive with liability plus theft cover and set aside your own repair reserve. Premiums are lower than in Western Europe, claims are handled more slowly, and the assessor comes when he comes.
Driving licence: what is valid for how long
For the transition period, your home licence plus an International Driving Permit, which you can get cheaply from the issuing body in your home country before you leave, is enough almost everywhere. But the deadlines are shorter than most people think, and they are not tied to your visa. Panama is the strictest example: as a tourist you may drive on a foreign licence for 90 days, even if your entry stamp allows 180, and the privilege ends the moment your residence is granted; after that you convert your licence at Sertracen, after authentication and without a new driving test, only with a sight and hearing test. Uruguay requires residents to have their licence recognised through the intendencia (the departmental government), including an apostilled certificate from the authority that issued your licence, with a translation; Uruguay has a genuine exchange agreement only with Spain. In Paraguay and Mexico things are more pragmatic, but the basic rule is the same everywhere: tourists drive on their home licence, residents get the local licence quickly. If you put it off, you are formally driving without a valid licence in the event of an accident, and that is exactly when the insurer refuses to pay. Your own foreign ministry's travel advice for the destination is worth reading before the first long drive anyway.
Driving: the honest version
Driving itself is the part no document teaches you. The main routes are often better than their reputation; Uruguay's coastal roads and Panama's stretches of the Pan-American Highway are relaxed drives. Away from them, expect potholes, unlit vehicles, animals on the road and motorbikes coming from every direction. My rules after all these years: no cross-country driving at night, drive defensively, never let the tank drop below a quarter, and double the distance in the rain.
Police checks are frequent and mostly harmless: papers, warning triangle, fire extinguisher. And then there is the topic everyone raises once the second beer is open: the mordida, the little nudge with a banknote. Yes, it exists, more in some countries than others; in Mexico it is folklore and in Uruguay it has practically died out. I will tell you two things about it. First: paying is a criminal offence, for you too, and it makes you open to blackmail, because the officer now has something on you. Second: the boring strategy works. Stay friendly, show your papers, take your time, insist on the official ticket. Anyone who signals that they know the official procedure and are in no hurry is an uninteresting target. You will find more on the traffic reality in individual countries in our safety checks, for example for Mexico or Paraguay.
Your buying checklist
If you buy locally, and you should, do it in this order:
In the end, the car is a good example of the whole relocation project: things work here, but they work differently, and if you try to transplant your habits from home unchanged, you pay twice over. If you are currently working out which country to move to and want to know how residence, tax, banking and, yes, daily life with a car fit together in your case, talk to us. We have been guiding clients through exactly these steps for years, from choosing your residence to our service packages, and I will also tell you straight if your plan will not work as it stands.
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Carpe Diem. Life is short and fleeting. One shot. Make it count.